U.S. economic growth may return to the slowest pace since the third quarter after accelerating in the fourth quarter on the strongest consumer spending in four years, according to Pacific Investment Management Co.’s Richard Clarida.
“The first quarter does look very strong — the question is, as we move into 2012, does the economy taper back to 2 percent growth?” said Clarida, a strategic adviser at the world’s biggest bond fund manager, during an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “I think that we revert back down into the 2s in the second half of the year.”
U.S. payrolls had the smallest gain in four months as bad weather prevented more than 800,000 Americans from going to work during the January survey week, the Labor Department said today.
“If these numbers stay low, then that means that the amount of economic growth we get will be held back by a slower labor force,” said Newport Beach, California-based Clarida, 53.
The world’s largest economy expanded in the fourth quarter of 2010 at a 3.2 percent annual rate, as consumer spending climbed by the most in more than four years, according to Commerce Department figures released on Jan. 28. For all of 2010, the U.S. economy expanded 2.9 percent, the most in five years, after shrinking 2.6 percent in 2009.
Federal Reserve Chairman Ben S. Bernanke is among policy makers still concerned the pickup in growth is failing to revive the labor market quickly, one reason why the Fed said it will continue a plan to add another $600 billion into the economy.
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said yesterday the U.S. economy faces “major headwinds,” and that unemployment “is likely to be higher than 8 percent as late as the end of 2012.”
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