IN 2015 America has seen its share of sour economic data. Employment growth has slowed and investment spending is stalling. Consumers are not opening their wallets. And there was more bad news today: the first estimate of first-quarter GDP showed that the economy is now growing at a snail’s pace of 0.2% year-on-year.
What’s behind this blip? The very cold weather at the beginning of the year forced many Americans to stay at home instead of going to the shops. The strong dollar is also hitting firms: a third of revenues from companies in the S&P 500 index come from abroad. Corporate profits fell by 1.6% in the fourth quarter of 2014 and were 6.4% lower than in the same quarter of 2013. As profits have been squeezed, investment has also stalled.
Measly wages (see chart) are another important factor. Lots of the jobs created in the past year or so have been in low-wage professions,…
More bad news
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