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Let’s face it — the U.S. economy is going nowhere fast
They are two of the scariest words in the English language, often heard as the engine room is starting to flood or the parachute fails to deploy: “Don’t panic.” And that was the message among economists trying to make sense of how it is, exactly, that the U.S. could be slowing, when most forecasters had expected it to be speeding up by now.
Time to lower the lifeboats? Not quite. But the economic seas are starting to look ominously rough. Let’s consider why the situation is worrying.
First, it is clear that the economy is much weaker than we thought. As Deutsche Bank economists note, over the past four quarters the non-consumer portion of the economy, notably businesses (you know, the ones that hire people), has grown at a rate of -0.2 percent. That’s recession territory.
A number of economists are now also ratcheting back their forecasts for full-year growth to less than 2 percent, or what many experts think is the economy’s “stall speed.”