Why the U.S. economy barely grew in the first quarter
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As Americans keep their attention on the 1 percent of the country controlling much of the wealth, a new number is making headlines.
That number is .1 percent — or how much the U.S. economy grew.
Forbes reported Wednesday that the Bureau of Economic Analysis' advance prediction showed America’s economy is slowly growing (yes by .1 percent), with much of the blame being placed on cooler and wintry weather that left people inside and away from shopping. Samantha Sharf of Forbes wrote that the winter season might not be the only reason for a small growth.
“Real GDP growth was quite a bit weaker than already feeble expectations,” wrote Guy Berger, U.S. economist at RBS, in a note on the results, according to Sharf. ”Q4’s GDP report was the inverse of today’s — it had a relatively strong headline, ho-hum details (today we got a weak headline, ho-hum details).”
And, no, that doesn’t bode well for job creation, wrote Peter Morici of Fox Business. Morici also wrote that young buyers are having a tough time getting involved in the market, too.
“Simply, it’s time for the Obama administration to pay the piper for using student loans to prop up demand and keep young adults out of the job market to inflate growth and suppress the unemployment rate over the last five years,” Morici wrote. “Fewer housing starts and more focus on lower-cost units do not bode well for growth.”
So students and young buyers are struggling, the winter kept people inside, and expectations might have been high.
But how do other economists feel about this GDP situation?
The Wall Street Journal published Wednesday myriad reactions from different expert economists, who also said this was pretty much expected.
“Grim, but old news given the uncertain impact of the weather; Q2 will be better,” said Ian Shepherdson of Pantheon Macroeconomics, according to WSJ.
And Annaisa Piazza, of Newedge Strategy, doesn’t see these issues slowing down for the United States. In fact, there likely won’t be much policy change from the government, WSJ reported.
“All in all, today’s GDP was clearly disappointing,” Piazza wrote. “However, some of the decline is clearly explained by adverse weather over the winter and will be reversed in the coming quarter. We rule out that the Fed will modify its policy outlook on the back of today’s GDP report and the gradual tapering is set to continue in the coming months.”