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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: lorne who wrote (131019)	4/28/2012 11:49:23 AM
From: Hope Praytochange	1 Recommendation Respond to of 224748

U.S. Growth Slows to 2.2%, Report Says By SHAILA DEWAN Published: April 27, 2012 The economic recovery slowed more than expected early this year, raising fears of a spring slowdown for the third year in a row and giving Republicans a fresh opportunity to criticize President Obama’s policies. The United States gross domestic product grew at an annual rate of 2.2 percent in the first quarter, down from 3 percent at the end of last year, according to a preliminary report released Friday. It was the first deceleration in a year, but it was not nearly as severe as other setbacks in the last couple of years. Mitt Romney, the presumptive Republican presidential nominee, has been hammering on economic issues all week, insisting that the president has held back the recovery and intends to do further damage. Representative Kevin Brady, a Republican from Texas and vice chairman of the Joint Economic Committee, called the numbers “beyond disappointing.” “The damage being done by the Obama administration’s policies have produced a weak recovery,” he wrote in a statement. The American economy has been growing since the second half of 2009, coming close to a 4 percent growth rate in early 2010 before faltering. Growth slowed nearly to a halt in the first quarter of 2011 but accelerated throughout the rest of the year. The first-quarter growth was weaker than expected. United States stock markets largely shrugged it off, however, perhaps in part because the country is growing while many economies are contracting. Economists initially predicted a much weaker showing in the latest quarter, partly because of a large accumulation of inventories in the fall and winter that needed to be worked off. But in the last few weeks, expectations rose on strong jobs reports and rising consumer confidence. Consumer spending did turn out to be the major strength early this year, growing 2.9 percent compared with 2.1 percent in the last quarter of 2011. Business investment, which had been a bright spot, declined in the most recent quarter. Government spending also fell more than anticipated, lopping more than half a percentage point off total growth, thanks in part to a particularly large drop in military outlays. Many economists pointed out that consumer spending, mostly on cars and other large items, seemed to have come at a cost. Consumer savings declined. That suggests that spending growth could become unsustainable as households exhaust their reserves. But estimates of personal income tend to be revised upward, and past declines in the savings rate have been erased by later estimates. Economists were also troubled by the decline in business investment. Businesses spent more on equipment and software but much less on infrastructure. Some of that decrease was expected because a tax break for capital investment expired at the end of the year. By far the steepest decline in investment in the first quarter was in construction related to mining, oil and gas, while manufacturers actually increased their spending on factories and office buildings. Mark Zandi of Moody’s Analytics said the low investment numbers showed that businesses remained “very cautious.” Growth in residential housing swelled by 19 percent, the fourth consecutive increase in that much-diminished sector and the first time it has shown a straight year of growth since 2005. Economists argued over how much of that increase — and, for that matter, the surprising strength in consumer spending — was caused by the unseasonably warm winter. Other factors that contributed to the growth have already appeared to soften, contributing to fears of another false dawn. Shipments of durable goods increased last month, but new orders showed the steepest drop since January 2009. The trade balance improved, but job growth weakened and, more recently, new claims for unemployment benefits have risen. “The G.D.P. report was disappointing,” economists at Morgan Stanley wrote. “The mix of activity pointed to slower growth ahead.”