In the last year, the nations economy has grown just 2.4 percent in the second quarter, with the federal stimulus measure fading away.As a result of the low economic growth, the job outlook for the nation looks disappointing.
Prajakta Bhide, a research analyst for the United States economy at Roubini Global Economics, gave her thoughts. “Given how weak the labor market is, how long we’ve been without real growth, the rest of this year is probably still going to feel like a recession, It’s still positive growth, rather than contraction, but it’s going to be very, very protracted.”
A Commerce Department report on Friday showed that the economic growth had fallen greatly in the last quarter with an annual rate of 5 percent at the end of 2009 and 3.7 percent in the first quarter of 2010.The consumer spending was weaker than thought earlier in the economy.
As a result in the slow progress, economist believe the annual rate will drop down to as low as 1.5 percent. In addition, the fiscal stimulus measures that grew are going to expire soon. Efforts in expansion of individual programs and unemployment benefits have resulted in negative response from congress.
Christina Romer, chairwoman of the president’s Council of Economic Advisers said,
“We need 2.5 percent growth just to keep the unemployment rate where it is. If you want to get it down quickly, you need substantially stronger growth than that. That’s what I’ve been saying for the last several quarters, and that’s why I’ve been hoping that we’ll please pass the jobs measures just sitting on the floor of Congress”.
Pressure is on the Federal Reserve to do everything they can do to prevent a double dip recession.Reports from Federal policy makers show the central bank has become increasingly worried about where the economy is going.
The stimulation growth in the second quarter was accomplished by business investments on office buildings, equipment and software.That activity shot up at an annual rate of 17 percent in the second quarter,compared to 7.8 percent in the first quarter.The equipment and software category grew above expected expectations with an annual rate of 21.9 percent.This was the fastest pace seen in the past 12 years.
John Ryding, the chief economist at RDQ Economics said,
“We’re seeing a sort of handover from consumer spending to capital spending. The consumer also looks to have saved more than we thought before, which means they’re perhaps further on the road to financial adjustment than we thought they were previously.”
Consumer spending take a major roll in the progress in the United states economic recovery, and consumer spending has been unstable do to the 1.9 percent rate in the first quarter then the 1.6 percent rate in the second quarter.Personal savings in consumers grew above what was expected. Consumer savings jumped up from 4 percent to a 6.2 percent difference.
As the global economy recovers,the American trade has increased.However, the American import was higher than the export. Imports grew at an annual rate of 28.8 percent, the greatest jump in a quarter-century, compared with a 10.3 percent gain in exports.
Government spending grew to an annual growth rate of 4.4 percent after a decline of 1.6 percent in the first quarter.
