The U.S. economy is understandably wobbly from the Great Recession, but many economists say growth should have picked up more by now, and add they are growing increasingly worried.
Higher food and commodity prices are cutting into economic output by dampening consumer spending.
The housing sector remains weak as well.
More and more forecasters, meanwhile, are slashing their second-quarter growth predictions, The Wall Street Journal reports.
|Gasoline prices are still high.
(Getty Images photo)
JPMorgan Chase & Co. economists cut their growth estimate to 2.5 percent from 3 percent, while Bank of America Merrill Lynch economists cut theirs to 2 percent from 2.8 percent and Deutsche Bank went to 3.2 percent from 3.7 percent.
"It's very hard to generate a rapid recovery when rapid recoveries are historically driven by housing and the consumer," says Nigel Gault, an economist at IHS Global Insight, tells the Journal.
Annualized, inflation-adjusted growth won’t break 3 percent in the coming quarters, Gault predicts, which means it will be too slow to make a meaningful dent in unemployment.
The U.S. gross domestic product grew at an annual rate of 1.8 percent from the 2010 fourth quarter pace of 3.1 percent, the Commerce Department reports.
“Consumer spending was pretty anemic last quarter, and households are likely to be somewhat restrained going forward,” says Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who had forecast GDP would be revised to 1.9 percent, according to Bloomberg.
“Economic growth will run a little faster than the first quarter but nothing blockbuster.”
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