America has had the wind knocked out of its sails this year.
Volatile stock markets, weak economic growth and a hiring slowdown have created a perfect storm for nearly flat growth. The question is whether the U.S. economy and markets can right the ship in May and beyond. There’s reason to believe they can start to this week.
“We’re in a slow growth economy,” says Dorothy Weaver, former chair of the Miami Federal Reserve branch and CEO of Collins Capital. “I don’t think we’re heading for a capsized economy, but that doesn’t mean we couldn’t be hitting low winds and a doldrum.”
The economy’s storm clouds: April was rough all around. It started with news that the economy only added 126,000 jobs in March, and previous months of job gains were revised down. Retail sales for March arrived in mid-April and they were sluggish.
Then last week we learned that America’s economic growth was next to nothing, a mere 0.2% in the first quarter. Maybe the worst news about the growth: Businesses haven’t been investing in themselves this year.
The newest projections for economic growth published by the Atlanta Fed show this spring could be disappointing too — less than 1%.
It all creates a gloomy picture.
But this week’s jobs report could be the first sign that the economy is righting the ship back to last year’s strong performance. Many experts believe the March report was a fluke and that job growth will pick back up in April.
“The labor market is good not great,” says Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. “It was an aberration what we saw [in March.]”
Experts point out that the U.S. economy is still widely considered the best performer in the world. But that’s also a problem for big multinational companies. Demand from China is dropping while Europe is just beginning to move in the right direction. That’s causing American exports to go down. The strong U.S. dollar is putting an extra burden on emerging markets, another key trade group, too.