Is the Economic Recovery Slowing? [AUDIO]
Many financial experts were predicting a strong economic bounceback at the beginning of 2014, but so far the job creation report has been disappointing, the stock market has been on a roller coaster ride and consumer spending has slowed.
So, what happens from this point forward?
“When the weather is cold and snowy the way it has been lately, it may delay some spending, such as a car purchase,” said Rutgers University economist James Hughes. “Or, it can shift dollars from one part of the economy to the other, like paying for snow removal instead of going out to a restaurant, but consumers are still going to be spending money.”
Hughes said while last month’s jobs report was somewhat disappointing, over the last three years there have been 2.3 million new private sector jobs created on average.
“That’s a pretty good metric, and it does indicate that there’s probably good momentum going into 2014,” Hughes said. “Seemingly we hit the pause button in December and January, but I think we’ll be making that up going forward if we have a nice, mild spring and the like.”
Hughes continues to see some very strong sectors in the economy, particularly housing.
“And we do have reasonably good expectations for business spending,” Hughes said. “We have to remember growth is never a smooth, even process; sometimes you have spurts that are above trend, and for a month or two you go below trend.”
We may have hit a few bumps in the road, according to Hughes, but they will eventually even out.
“The expectations are not too different today than they were two months ago,” Hughes said. “I think we’re going to see a year of growth similar to what we had in 2013, and that will mean the unemployment rate will decline further.”