The U.S. economy shrank 0.7 percent during the first three months of this year, the government said Friday, and amid a flood of headline warnings that things are about to get “ugly,” analysts concluded the “latest economic expansion is fundamentally weaker than its predecessors.”
Reuters blamed the weather, the performance of the dollar on the worldwide stage and “disruptions at West Coast ports.”
“With growth estimates for the second quarter currently around 2 percent, the economy appears poised for its worst first-half performance since 2011,” the report said. “The economy’s recovery from the 2007-2009 financial crisis has been erratic.”
The New York Times said what it called the “pullback” was the third time economic activity deflated since the “current recovery” began in 2009.
That was when the American economic stepped off a cliff and plunged despite the combined efforts of President Bush and President Obama to spend hundreds of billions of dollars in “stimulus,” increase regulation of Wall Street and take over private corporations like General Motors.
Since then, Obama frequently has been heard boasting of lower unemployment rates, but the figures largely have been skewed by the hundreds of thousands of workers whose job prospects were so poor they simply have stopped looking.
The Times reported that despite the “wintry weather” and a “work slowdown,” “the lackluster report for January, February and March underscores the American economy’s continuing inability to generate much momentum.”
The analysis said: “Exports had been a particularly bright spot for the American economy in the first years of the recovery, as world trade rebounded from the plunge that followed the financial crisis in late 2008 and early 2009. Those gains have moderated more recently, and are likely to remain under pressure as the stronger dollar makes American goods more expensive for overseas buyers.”
Other analysts charge that the nation’s work on various trade agreements, such as the new Pacific nations agreement sought by President Obama, are at fault for moving millions of jobs overseas and forcing consumers to buy foreign products.
“This isn’t the off-to-the-races kind of expansion we envisioned six months ago,” Scott Anderson of Bank of the West told the Times. “More and more folks are coming around to the view that the long-term growth rate of the American economy is 2 percent, at best. … It’s two steps forward, one step back.”
At a Wall Street Journal blog, Josh Mitchell noted that many believe the economy “is poised to rebound this spring and summer.”
And he said one shouldn’t “expect much talk – yet – about the economy dipping into a recession.”
Bloomberg reported Michael Gapen, an economist for Barclays, expects “an acceleration in the second quarter.”
But others are citing warnings from Microsoft, Procter & Gamble and an expected dip in sales and profits because of the status of the U.S. dollar internationally.
Said CNN: “Thank goodness spring is here. Winter really wore down the U.S. economy.”
Even as the current numbers were developing, Obama was boasting in his State of the Union address of his victory over the economic recession – which talk-radio legend Rush Limbaugh blasted as “a vote-buying scheme” full of “empty promises.”
“We are 15 years into this new century. Fifteen years that dawned with terror touching our shores; that unfolded with a new generation fighting two long and costly wars; that saw a vicious recession spread across our nation and the world. It has been, and still is, a hard time for many,” Obama said.
“But tonight, we turn the page,” he said during the annual address to Congress.
“Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis. More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we’ve been in almost 30 years.”