US Economy Not Looking Too Bright For The Future
29 June 2012 12:00 - Phoebe Robinson

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US Economy Not Looking Too Bright For The Future  

Figures have come in that show the US economy grew by 1.9% in the first quarter; this shows us that there was an increase in consumer spending. However this does not seem to have lasted as consumer spending seems to have calmed down as American’s hold back due to the worrying prospects of the global economy.

The newly revised GDP figures seem to match the figures originally speculated by the government, Commerce Department figures. The readings given in Washington today show an increase in GDP by a fall in corporate profits which is the first time this has happened in three years.

There has been a decrease in sales across the corporate circuit in America. This decrease reflects the caution Americans are taking at the moment. It seems households are reluctant to increase their spending. This is critical for the US economy as 70%  of the economy is accounted for by consumer spending and in line with that comes consumer confidence, which by the looks of things is not about to increase in a hurry. A struggling job market with unemployment figures increasing alongside a slowing global market will not make it easy to encourage US expansion.

Worryingly the number of applicants for unemployment benefits was sitting last week near the highest level of the year. This shows little improvement in the labour market giving even more of a dampener on the US economy which is looking very gloomy at the moment.

“The economy is really in a difficult spot at the moment,” said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York. “With the labour market weak and the outlook for incomes weak, it’s hard to see how consumer spending can grow solidly.”