http://www.bloomberg.com/news/2013-02-28/economy-in-u-s-eked-out-gain-to-end-2012-as-trade-gap-shrank.html
Earlier, it was suspected that the US economy contracted in the last quarter but after additional information came in, it appears that the economy grew by about 0.1%. Most of this gain was established through a shrinking of the trade deficit. The growth rate is, however, still very low and the federal reserve is likely to maintain its expansionary monetary policy in the hopes of further stimulating the economy.
On the bright side for the US economy, jobless claims have been dropping - hopefully this is because of increased employment opportunities rather than a growth in discouraged workers. Consumer purchases have been rising and the housing market is also improving. Consumer confidence is doing well and it is hoped that the economy will weather the coming spending cuts without too much trouble.
Earlier, it was suspected that the US economy contracted in the last quarter but after additional information came in, it appears that the economy grew by about 0.1%. Most of this gain was established through a shrinking of the trade deficit. The growth rate is, however, still very low and the federal reserve is likely to maintain its expansionary monetary policy in the hopes of further stimulating the economy.
On the bright side for the US economy, jobless claims have been dropping - hopefully this is because of increased employment opportunities rather than a growth in discouraged workers. Consumer purchases have been rising and the housing market is also improving. Consumer confidence is doing well and it is hoped that the economy will weather the coming spending cuts without too much trouble.
I agree that all of these indicators specified above do indicate a positive sign, suggesting that consumers are more comfortable spending. However, gasoline prices as well as increasing payroll taxes each year are continuing to have a negative effect on discretionary income in the past few months. This,as a consequence, will not make it easier to sustain household consumption. So I guess the real question, is how do they figure out how to balance all these conflicting issues?
ReplyDeleteFrom our study of trade deficits on class we know that since the U.S. economic gain was mainly from shrinking the trade deficit then we must have been exporting more than we were importing last quarter.
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