By Isaac Cohen*
Some signals indicate the US economy weak performance, during this year’s first quarter, may continue into the second quarter. Furthermore, in the second revision by the Commerce Department, the weak 0.2 percent growth for this year’s first quarter is expected to become a contraction. True, the central bank saw as transitory some of the factors contributing to this meager first quarter performance, such as the severe winter, the strike in West coast ports and the strong dollar. Additionally, hiring regained strength in April and low gasoline prices benefitted consumers.
However, also in April, manufacturing contracted for the fifth consecutive month, consumer spending was restrained and exports decreased. Therefore, a survey of 62 economists, by the Wall Street Journal, revealed economic growth in 2015 is expected to be 2.2 percent, down from 2.4 percent in 2014.
If revised first quarter growth figures reveal a contraction, it would be the third fall registered in the present recovery, which contrasts with the fact that there were no contractions during the previous three recoveries. Therefore, more than two thirds of the economists surveyed by the Wall Street Journal estimated the anticipated liftoff in interest rates will start until the Federal Reserve September meeting.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.