Economic growth slows sharply; new jobless claims rise

[somone]

http://www.latimes.com/business/la-fi-economy-growth-20110429,0,6163865.story

Economic growth slows sharply; new jobless claims rise
By Don Lee, Los Angeles Times

Two new snapshots of the economy — one showing a sharp slowdown in first-quarter economic output and the other a surge in weekly unemployment claims — underscored the fragility of the recovery, its vulnerability to global shocks and the long road still ahead for millions of American workers.

Many analysts shrugged off the report that gross domestic product grew just 1.8% in the first part of the year — down from 3.1% in the fourth quarter last year. Economists said the slowdown was caused mostly by temporary factors such as the harsh winter weather and a surge in oil and food prices, which took a bite out of consumer spending and the nation's trade.

Officials at the Federal Reserve as well as many private forecasters expect GDP growth to bounce back to 3% or higher in the rest of the year. But that depends partly on an easing of global economic and political problems, particularly the unrest in the Middle East and North Africa that is behind the spike in petroleum prices. Such a reduction of tensions is far from certain. And new shocks are also possible, given the continuing upheavals in the region and elsewhere.

The latest GDP figures were close to analysts' expectations, but the jobless claims report was an unwelcome surprise. With hiring picking up in the last two months, experts predicted a drop in new filings for jobless benefits. Instead claims rose for the second time in three weeks, to the highest level since late January...

[lib2DaBone]

1. $4 gas is the death blow.. it will shut the economy down....

.. it has in the past.. it is happening again.

$3.6 Trillion in derivatives are maturing and coming due in the next year. Obviously, American banks don't have the money to pay these.

Look for Fanny and Freddie to be turned over to China.

Learn to speak Chinese.. they are the new boss.

[franzia99]

2. Previously, unemp. has been 5 pts higher than normal during the decade following a financial crisis

So only 7 more years or so of this shit before the economy might recover

http://www.project-syndicate.org/commentary/shiller73/English

According to the Reinharts’ paper, when compared to the decade that precedes financial crises like the one that started three years ago, “GDP growth and housing prices are significantly lower and unemployment higher” in the subsequent “ten-year window.” Thus, one might infer that we face another seven years or so of bad times.

But now the Reinharts and Rogoff have systematically studied many more examples in modern financial history. There is also the world financial crisis that attended the oil shocks of 1973 and 1979, and there are the country-specific financial crises in Spain in 1977, Chile in 1981, Norway in 1987, Finland and Sweden in 1991, Mexico in 1994, Indonesia, Korea, Malaysia, the Philippines, and Thailand in 1997, Colombia in 1998, and Argentina and Turkey in 2001.

So, there are many more than just two modern cases (though they are not all entirely independent, because they are somewhat bunched in time). From them, the Reinharts and Rogoff found, for example, that median annual growth rates of real per capita GDP for advanced countries were one percentage point lower in the decade following a crisis, while median unemployment rates were five percentage points higher.

How did this happen? They note that, in general, debt levels and leverage rose during the decade preceding these crises, propelling increases in asset prices for a long time. Reinhart and Rogoff describe a “this time is different syndrome” during the pre-crisis boom, whereby these bubbles are allowed to continue for far too long, because people think that past episodes are irrelevant.

[MindandSoul]

3. You mean, the Republicans haven't created any jobs yet?