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Report: U.S. Growth Slowdown Was Expected
Posted By RVBusiness On April 22, 2013 @ 11:47 am In Breaking News | No Comments
Like a horror movie with multiple sequels, The Economy: Spring Swoon IV probably won’t be as surprising or as scary as its predecessors.
Repeating the pattern of the past three years, the U.S. is cooling off as the weather turns warmer, with job growth slowing, retail sales falling and manufacturing output dropping after gross domestic product surged an estimated 3% in the first quarter. What’s different this time? The slowdown isn’t unexpected: Economists surveyed by Bloomberg have had it penciled into their forecasts for at least a month.
The deceleration is coming in response to an identifiable cause — the biggest federal budget tightening in more than 60 years — rather than inchoate fears about a break-up among countries that use the euro, a Treasury-debt default or a hard landing for China’s economy. And the U.S. looks better prepared to withstand it, thanks in part to a rebounding housing market.
“There definitely has been a slowdown in the past month,” said Russ Koesterich, global chief investment strategist at New York-based BlackRock Inc., the world’s largest money manager with $3.8 trillion in assets. “I don’t think it is going to be as dramatic or necessarily as frightening as some of the ones we had back in ’10, ’11, and ’12, which were really exacerbated by a lot of geopolitical issues.”
That’s good news for the stock market. While shares may fall in response to weaker data, a sell-off “would represent a potentially attractive buying opportunity,” said Jerry Webman, chief economist at New York-based OppenheimerFunds Inc., which has $208 billion in assets under management.
“The market can end the year higher than it is today, but we’re probably going to see some lower prices first,” with the Standard & Poor’s 500 Index over 1,600 by the close of 2013, he said. The stock gauge was 1,555.25 on April 19, down 2.1%t for the week but up 9% this year.
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