The latest economic data paints a disappointing picture for the U.S. economy with economists now warning that a recession is all but inevitable.
As the world’s largest economic, the health of America’s balance sheet is a bellwether for the rest of the world. New figures issued this week by the U.S. Bureau of Economic Analysis show that there is cause for concern, with a sharper than expected slowdown. While economists expected to see 2.3% growth, the official data came in with a GDP growth of just 1.1%.
High interest rates, a slump in hiring and declining manufacturing output along with the ongoing banking crisis have all taken their toll during the first quarter of the year.
The managing director of investment management firm Cetera Investment Management, Brian Klimke said, “January was really the standout month and since then we’ve seen weakness in February and March, which has really been slowly dragging down the economy.
“If we’re looking to the future, data does seem to be continuing to weaken.”
This is a view shared by Capital Economics deputy chief economist Andrew Hunter, who says, “The disappointing 1.1% annualised rise in first-quarter GDP indicates that the economy had less forward momentum at the start of this year than previously thought. We continue to expect the drag from higher interest rates and tightening credit conditions to push the economy into a mild recession soon.”
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