Slow recovery continues for U.S. economy
WASHINGTON – The U.S. economy’s recovery looks enduring. It’s just not strong.
Hiring, housing, consumer spending and manufacturing appear to be improving, yet remain less than healthy. Economists surveyed by The Associated Press expect growth to pick up this year, although not enough to lower unemployment much.
A clearer picture of the nation’s economic health will emerge today, when the government reveals how many jobs employers added in April.
“The outlook is for continued moderate growth,” John Williams, president of the Federal Reserve Bank of San Francisco, said in a speech Thursday. “Nonetheless, we have nearly 4½ million fewer jobs today than five years ago, and the unemployment rate remains very high at 8.2 percent.”
The 32 economists polled by the AP last month are confident the economy has entered a “virtuous cycle” in which more hiring boosts consumer spending, which leads to further hiring and spending. They expect unemployment to drop from 8.2 percent in March to below 8 percent by Election Day. But they still think the rate won’t reach a historically normal level below 6 percent until at leas
Here’s a look at the economy’s vital signs:
The job market is gradually improving, although not as fast as it had been. From December through February, employers added a strong 246,000 jobs a month. That figure sank to a weak 120,000 in March. The April jobs report could clarify whether March was a one-month dud – or evidence of a more lasting slowdown in job creation like the one that occurred in mid-2011.
The housing market has been a dead weight on the economy. The single-family home market is still struggling. House prices dropped for six consecutive months through February, according to the Standard & Poor’s/Case-Shiller home-price index. Americans bought fewer previously owned homes in March.
The economists polled that the lingering effects of the housing bust are slowing the economy’s expansion.
Americans have proved willing to spend in the face of a wobbly economy. In the first three months of the year, consumer spending grew at an annual pace of 2.9 percent, the fastest in more than a year.
Some economists doubt that consumers can keep it up. They probably can’t afford to. Americans’ after-tax income in the first three months rose only 0.6 percent from a year earlier.
U.S. companies earned more money than analysts expected from January through March. They’re beating Wall Street estimates at the best rate in more than a decade. Improved earnings have propelled the Dow Jones industrial average up nearly 4 percent since April 10.
Manufacturing has provided much of the fuel for the U.S. recovery since the recession ended roughly three years ago. The busier factories are hiring. Manufacturers added 120,000 jobs a month through March this year, their fastest three-month pace since 1997.
But the economists surveyed think manufacturers will fill jobs more slowly the rest of the year. If so, that could weaken overall job growth.