It's now six years since the United States
began a slow recovery from its worst economic crisis since the Great
Depression.
But while the economic comeback has been steady
since then, growth appears to have stalled in the first three months of this
year.
According to the US Commerce Department, the
US economy grew at an annual rate of 0.2 percent which is much lower than
expected and the weakest performance in a year.
So rather than steaming back to the days
before the Lehman Brothers collapse, the pace of growth appears to hesitant and
slow.
Optimistic observers have cited a number of
one-off factors that have worked to make the quarter appear more sluggish than
it is.
Blizzard like conditions at the start of the
year meant consumers were at home not spending; the lower oil price trimmed
expansion from big oil companies and a union dispute at ports on the US west
coast meant exports slowed because ships were blockaded.
And the outcome appears to contradict other
good economic data with the US jobless rate now down the 5.5 percent.
While that looks good on the surface, it adds
to the debate about a "jobless recovery" in the US - more part time
or casual positions and workers in lower paying roles than before the Wall
Street collapse.
"We are creating jobs at a pretty rapid
pace - 200,000 per month in most months but these are for the most part not
very good jobs," Harvard University economist Benjamin Friedman told the BBC
earlier today.
"I think our economy here has a
long-term structural problem of not being able to provide good, decent jobs
with strong upward trajectory of the kind that middle class Americans have come
to know for many generations.
"I think that's going to be a problem
and I think it's going to be a problem for more than the remainder of this
year."
The outlook for weaker growth now appears
likely to make the US Federal Reserve more hesitant about raising interest
rates from their near zero level later this year.
The Fed today downgraded its outlook for
employment while still sending the message that a possible rate rise was a
"meeting by meeting" proposition.
Westpac senior economist Elliot Clarke says
the slow growth gives the Fed cause to "wait and see" and to be
patient about how future data evolves.
"There was further reason to believe
that its quite a weak number and momentum might not build as the Fed is
expecting which will be a concern for them," Mr Clarke told The World
Today.
"The US economy really depends on what's
happening with the consumer. They really need to see the consumer fire to see
growth accelerate and to give them justification to act on rates."
The surprisingly sluggish growth in the US
sent a warning to global investors and played a role in heavy falls across
Europe where markets in Frankfurt and Paris fell around three percent.
Until now, the strength of the US economic
recovery has been a bright spot in a world of otherwise anaemic or flat growth.
So today's outcome sends a message that the
US remains a wildcard in a world where slow or no growth is regarded as the
"new normal".