Despite hopeful outlooks and talks of growth, the U.S. economy is floundering.
Winter activity was strong, but as the weather warmed, consumers cut back on their spending while export demand fell as well. Gas prices rose, while businesses minimized their employment plans and investments.
The situation remains at a relative standstill as individuals and companies ponder their next steps.
Steve Blitz, chief economist at ITG Investment Research, explained:
“You’ve got more forces pulling growth down than pushing it up. We’ve downshifted from second gear back to first.”
MarketWatch.com does not predict a change in the near future.
“The looming threat of higher U.S. taxes and deep federal cuts kicking in on January 1, 2013 is one potential headache for businesses. Most economists who take part in the regular Blue Chip survey say the so-called fiscal cliff will act as a drag on growth in the remaining months of 2012.”
Another obstacle for the U.S. economy is Europe’s ongoing recession. Economies across the globe have been affected, and the United States cannot continue to rely on overseas markets for support.
The Corporate Executive Board’s Brian Kropp explained:
“What is different is what’s going on in China, India and South America. The opportunities are not as attractive as they were a few years ago. Executives don’t see any markets that seem very compelling.”