The New York Times is reporting this morning that our "sauntering" economy has slowed to a crawl, with the government lowering its estimate of economic growth in the second quarter to an annual rate of 1.6 percent.
With this and other grim numbers coming out this week, economists are concerned that the outlook for job creation, "which has been sputtering all summer, could deteriorate further."
The government originally reported last month that growth in the three-month period was 2.4 percent.This revision marks a "significant slowdown" from the annual rate of 3.7 percent in the first quarter and 5 percent in the last three months of 2009, the Times says.
It's not been a good-news week for the economy, nationally or in the Bay Area. Nationally, existing home sales in July were down to their lowest level in a decade, and sales of new homes that month were at their lowest level since the government began tracking such data in 1963. Walnut Creek Patch reported last week that in the Bay Area, home sales dropped 22.8 percent last month to the lowest level in 15 years as the economy "sputtered along
The Times also notes that orders large factory goods, excluding the volatile transportation sector, dropped in July, "indicating that recovery in the manufacturing sector is also stalling."
Such bad news tends to spook companies and consumers, the Times reports, and the concern is that faltering confidence would cause employers to hold back on hiring.
Nonetheless, these indicators don't mean we're heading back into a recession.
Ben Herzon, a senior economist at Macroeconomic Advisers, a forecasting group, told the Times: "It's difficult to point to a shock that would be bad enough to put the economy back into a recession," he said. "I just think it means that this recovery is going to be slower and more painful than we originally expected."