The U.S. economy expanded in the first quarter but failed to gather as much steam as expected, raising concerns of another year of sluggish growth.
Consumer spending advanced during the first quarter despite tax increases, but those gains were held in check by slowing business investment and government cutbacks.
The nation’s gross domestic product, a measure of all goods and services produced in the economy, advanced at a 2.5% annual rate between January and March, the Commerce Department said Friday. Economists had forecast a 3.2% expansion.
Now I wonder what could be holding the economy back? Or, who is responsible for such lackluster results? Is it still Bush, or has the torch officially passed to the current occupant of the WH? Pretty soon we may see a replay of Jimmy Carter’s economy: inflation along with rising interest rates, yet no growth. Remember stagflation? Only this time it will be brutal because we have $16T in debt to service and if interest rates on that debt goes up, service payments would accelerate deficit spending.