U.S. economy recovering but isn’t yet accelerating
Hiring, housing, consumer spending and manufacturing all appear to be improving, yet they remain less than healthy. Economists surveyed by The Associated Press expect growth to pick up this year, though 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,” said John Williams, president of the Federal Reserve Bank of San Francisco, in a speech Thursday. “Nonetheless, we have nearly 4 1/2 million fewer jobs today than five years ago, and the unemployment rate remains very high at 8.2 percent.”
The job market is gradually improving, though 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, in particular, is still struggling. House prices dropped for six straight months through February, according to the Standard & Poor’s/Case-Shiller home-price index. And Americans bought fewer previously owned homes in March.
The economists polled by the AP worry that the lingering effects of the housing bust are slowing the economy’s expansion. They say growth can’t accelerate until national home prices finally hit bottom.
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.
Manufacturing has provided much of the fuel for the U.S. recovery since the recession ended roughly three years ago. American manufacturing expanded last month at the fastest pace in 10 months. New orders rose to the highest level in a year, a signal of more production in coming months. Export orders also rose, despite worries that weaker economies in Europe and China could hold back U.S. exports.