Investing and Global Finance News

Should the U.S. Be Preparing for a Slump?

The U.S. economy’s recovery has been disappointing thus far, and recent data has foreshadowed a potential slump as the global situation worsens.

Payroll averages have fallen since last year, while the Labor Department’s recent report reveals additional instability.

Macroeconomics Advisers’ Joel Prakken explained:

“The sharpness of the deceleration seems consistent with other incoming data suggesting the economy, weighed down by heightened uncertainty over the European financial crisis and by growing concerns about domestic fiscal policy, slowed early in the year.”

However, a number of economists feel that it is too early to project negative economic development, explaining that the hiccup may be a result of ‘the weather effect.’ May is often a slow month because of seasonal adjustments.

According to Ellen Zentner of Nomura,

“Manufacturers are very concerned about Europe because a blowup in Europe means a global slowdown. It hasn’t translated into layoffs- businesses are just hiring less.

“What the seasonal bias has done is it’s made the recovery look like a stop-start recovery. Instead, the pace of the recovery has been very steady- very moderate, and disappointing, but steady.”


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