GDP growth slowed to 2.2% in the first quarter of 2012, based on preliminary estimates. The slowdown has implications for small businesses who supply goods to corporations and are government contractors.
The burden of unemployment falls heaviest upon blacks and unfortunately, economic growth in important but is not sufficient. Even when US GDP grew at 6.7%, the unemployment rate for blacks averaged 10.6%.
Another month or two is required in order to determine whether the lower than expected number of jobs created in March was caused by high oil prices, a statistical aberration or a slowing economy.
The unemployment rate declined from 8.3% to 8.2% but only ½ as many jobs (120,000) were created in March as in previous months.
The Federal Reserve is walking on thin ice. In talking down the economic recovery to rationalize low rates, it may be dampening investor and consumer confidence.
The US Economy is now recovering at a normal rate. As inflation fears rise, the Federal Reserve Bank will have to reconsider its pledge to keep interest rates fixed until 2014. Indicators to look for in the future are discussed.
Today’s Labor Department Jobs Report showed that the unemployment rate in February remained constant at 8.3% and 227,000 jobs added to the labor force.
To understand how the economy is doing, most people look to the unemployment rate. However, other indicators may be even more important. It all depends upon where the economy is in the business cycle.
Higher interest rates make it easier for people to get home loans because lenders receive a greater reward for taking risks on home mortgages. Since the economy is growing, the Fed should stop its low rate policy.
Hispanic/Latino CEOs do not plan to increase hiring in 2012. They are the only group where 20% of CEO will add jobs while 18% will cut jobs. Future hiring will be strongest in retail and virtually unchanged in construction. Regionally, Hispanic/Latino firm hiring will be strongest in the South.
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