Saturday, December 16, 2017
Business

Economy's growth disappointing in second quarter of the year

The U.S. economy grew a sluggish 1.2 percent in the second quarter, according to government data released Friday morning, as businesses cut back on investments and dashed hopes for what economists had expected to be a major bounce-back.

The latest data shows an economy pulled in two directions, powered by fast-spending consumers but held back by anxious companies responding to a strong dollar and turmoil overseas.

Tepid growth between the months of April and June was particularly unsettling because it extended a period in which the economy appears to be gradually shifting into a lower speed. For three consecutive quarters, the gross domestic product growth — the broadest measure of output — hasn't topped 1 1/2 percent. The nation hasn't seen such a meager stretch since 2009.

Though some economists said Friday that the U.S. is due for a pickup in the second half of the year, the recent weakness could dampen sentiment about the country's course and push Democratic nominee Hillary Clinton to take a more critical tone about the economy under President Barack Obama. Where Clinton has applauded the nation's recovery, adding that the U.S. needs to build a system that "works for everyone, not just those at the top," Republican nominee Donald Trump has said the economy is "terrible" and in danger of "massive recession."

The new data, released by the Commerce Department, also provides a note of caution for the Federal Reserve, which is debating whether to raise interest rates in the latter part of the year.

Economists surveyed by Bloomberg had expected that the U.S.'s GDP grew at a 2.5 percent annualized pace in the second quarter. The figure fell well below that mark in large part because of slowdowns across the business world: Companies were slower to stock shelves, buy equipment and invest in new infrastructure.

Some economists have said the U.S. is fairly well insulated against global turmoil provided American shoppers continue to spend, but the latest data suggests that the nation remains vulnerable so long as businesses don't pick up the pace. While a strong labor market and cheap gasoline prices are bolstering households, businesses are feeling the pressure of weaker corporate profits and a strong dollar that makes foreign goods cheaper within the U.S. — a challenge to the market share of American producers.

Personal consumption grew 4.2 percent in the second quarter, but nonresidential business investment — a measure of spending on everything from machinery to buildings — fell 2.2 percent. Business investment has declined for three consecutive quarters, something that hadn't happened previously during the seven-year recovery from the Great Recession.

"Well, it happens during recessions," said David Berson, chief economist at Nationwide Mutual. "But it's a rare thing to happen during expansions. And it's certainly holding the economy back."

Even as the U.S.'s GDP lags, the country has been sending mixed signals about the health of its economy. Hiring is strong but wage growth has been picking up only slowly. While the unemployment rate falls, an alarming number of middle aged workers remain on the sideline — not looking for work, and therefore not counted in the jobless rate.

Separately on Friday, the Commerce Department also said that the economy had grown just 0.8 percent in the first quarter of the year, instead of 1.1 percent as previously estimated. Growth hasn't topped 2 percent since the second quarter of 2015, but Michael Feroli, chief U.S. economist at JP Morgan Chase, said in the long run the country is still floating the range where it has been throughout the recovery.

Comments
Fueled by indulgence and machismo, restaurants are a hotbed for sexual harassment

Fueled by indulgence and machismo, restaurants are a hotbed for sexual harassment

When Brenda Terry was 16 and living in St. Louis, she was a hostess and food runner at a sports bar where female employees wore cute, little cheerleading skirts. One night, she said, a patron grabbed her crotch. She ran to her management team and the...
Updated: 10 hours ago
Pigs can be therapy animals too. So can horses and rats and cats and llamas and … (w/video)

Pigs can be therapy animals too. So can horses and rats and cats and llamas and … (w/video)

Shrieks of laughter echoed off the walls of the hospital as Thunder the mini pig flopped onto his side and the children huddled around him, scratching his pink, hairy belly. He and his wet-nosed partner, Bolt, drew patients in wheelchairs and bandage...
Published: 12/15/17
Vology landlord challenges property tax assessment

Vology landlord challenges property tax assessment

LARGO — Eight months after paying $10.15 million for the office building that houses IT services company Vology, a New York company is suing the Pinellas County Property Appraiser and Florida Department of Revenue contending its $5.5 million tax asse...
Published: 12/15/17
Taxpayer subsidies of Tampa golf courses are on the rise as struggles continue

Taxpayer subsidies of Tampa golf courses are on the rise as struggles continue

TAMPA — For the half of the year that Harry Nichols lives in Oldsmar, he plays 18 holes several times a month at Rocky Point Golf Course. On a good day, Nichols said he shoots close to par on the Dana Shores course. And if he’s really lucky, it’ll on...
Published: 12/15/17
Florida’s $1.1 billion Hardest Hit Fund winding down after some hard knocks

Florida’s $1.1 billion Hardest Hit Fund winding down after some hard knocks

In 2010, Florida was in the throes of an unprecedented housing crisis. One in every eight homes was in some stage of foreclosure. Today, the foreclosure rate is one in every 83. Because of that enormous drop, Florida’s Hardest Hit Fund will s...
Published: 12/15/17
Report: Rich will get still richer unless policies change

Report: Rich will get still richer unless policies change

By ELAINE KURTENBACHTOKYO — Global inequality has stabilized at high levels in recent years, a report said Friday, despite gains among the poor in China and much milder disparities in incomes and wealth in Western Europe. The World Inequality Report ...
Published: 12/15/17
How the Disney/Fox deal will shake up Hollywood

How the Disney/Fox deal will shake up Hollywood

Associated Press NEW YORK — After years of tremors, the earthquake that had long been predicted finally shook Hollywood. Disney’s deal to purchase most of 21st Century Fox ends the era of the "Big Six" major movie studios, toppling one ...
Published: 12/15/17
St. Petersburg’s Museum of the American Arts and Crafts Movement set to be complete in 2019

St. Petersburg’s Museum of the American Arts and Crafts Movement set to be complete in 2019

ST. PETERSBURG — The Museum of the American Arts and Crafts Movement, under construction since 2015, is scheduled to be complete by the summer of 2019.The five-story, 137,100-square-foot building will house businessman and collector Rudy Ciccarello’s...
Published: 12/15/17
Obamacare enrollment ends today, but some can get an extension

Obamacare enrollment ends today, but some can get an extension

Today is the day that open enrollment for the Affordable Care Act will close for most people. But those affected by the slew of hurricanes that pummelled Florida, Texas, Puerto Rico and other states earlier this year can take advantage of a two-week ...
Published: 12/15/17
Pack your bags: 107.3M Americans to set holiday traveling record

Pack your bags: 107.3M Americans to set holiday traveling record

A record-breaking number of Americans are expected to travel this holiday season.The American Automobile Association projects that 107.3 million Americans will pack their bags and travel more than 50 miles by planes, trains, automobiles and other mod...
Published: 12/14/17