Signs of U.S. economic weakness mount
Tess Vigeland: So if you thought the economy was on the mend, the numbers had another idea today. The service sector grew slowly in April and private payrolls rose less than expected. More signs that the recovery is still in start-and-stop mode.
But as Marketplace’s Alisa Roth tells us, some smart observers think today’s headlines are just a few more small bumps in the road.
Alisa Roth: ADP, which is a payroll processing company, says the economy only added 179,000 private sector jobs in April — that’s about 19,000 fewer than analysts were predicting.
The disappointing job numbers dovetail with a report from a group that tracks non-manufacturing activity in the U.S. economy. The Institute for Supply Management says the service sector grew at its slowest rate since last summer.
Together, the two reports suggest the economy and the recovery are still weak.
Stuart Hoffman: The higher gasoline prices seem to have knocked back consumer confidence and probably did take a bite out of consumer spending.
Stuart Hoffman is chief economist at PNC Financial Services Group. He says bad weather caused slow growth in the first quarter, and it did again in April.
Hoffman: Certainly the tornadoes are going to mess up some of the data we’ve seen in the latter part of April. Housing is perennially weak.
He says these bumps are serious. But they don’t pose a long-term threat to growth.
Beth Ann Bovino is a senior economist at Standard & Poors. She says this recovery is taking longer than usual. In the first year after a recession, growth has been more like 5 percent. In 2010, it was around 3 percent. And she thinks we’re looking at the same for this year.
Beth Ann Bovino: We had been saying overall that this was a half-speed recovery. It’s just going to be a little bit slower than even that half-speed.
She doesn’t think the recovery has been derailed, though. If the U.S. can keep growing 3 percent for a few more years, we’ll be OK.
We’ll get a better idea of how the employment picture is progressing Friday, when the government reports its April jobs numbers.
In New York, I’m Alisa Roth for Marketplace.
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