Today's PI carries a Caroline Baum column, adding additional perspective and concern with the state of the national economy. Most reports focus on the sluggish housing sector, arguing that the rest of the economy is doing fine, she says.
The first quarter's sluggish growth wasn't confined to housing, however. Exports declined, inventories were a small drag, and capital spending (investment in equipment and software) rebounded 1.9 percent -- better than expected based on monthly data on shipments but nothing to write home about after declines in the second and fourth quarters of last year.
Not a great picture, with additional reasons for concern.
Another quarter of growth with a 1 percent handle is apt to make Fed officials nervous for the simple reason that there is no mandate for a recession with inflation running at 2- something percent. When growth is that slow, all it takes is a big quarterly inventory decline to thrust a negative sign in front of GDP, which in turn leads to a diminution in confidence.
Read the whole column. Then ask again why the legislature decided to spend the bulk of a $2 billion balance this year.
More Well, the stock market is still kicking along.
