Behind The Sound Bite
Much as we would like to see the economy take a quantum leap forward, recent reports have said slow growth on the national and state level will be the norm for at least the rest of the year.
What does “slow growth” mean?
Business is expanding, just not enough to hire a lot of new people and generate profits for owners and shareholders.
What’s causing the sluggishness?
There's no one thing to blame — much as we might like to blame someone or something. But two recent reports revealed mixed sentiment among consumers. The Conference Board's widely watched Consumer Confidence Index fell for the second straight month in May, indicating increasing pessimism.
But on the other hand?
Economic reports can often conflict, and that seems to be the case lately. The also-watched consumer sentiment survey by Thomson Reuters and the University of Michigan found an increase not only in consumer confidence, but in expectations. But consumers expect only modest gains in the month ahead.
What else is keeping growth down?
Economic problems in China and Europe. The New England Economic Partnership says growth in Massachusetts will be moderate, assuming these problems are more than offset by growing U.S. demand and that plans for deep federal budget cuts will be eased by post-election compromises in Washington.
Are there any really positive signs in which we can take solace?
The housing market seems to be emerging from its funk. When he addressed a gathering in Worcester late last month, Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston, said residential housing investment grew on an annual basis by double-digit percentages in the fourth quarter of 2011 and the first quarter of this year. n
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