Sluggish Economic Growth in the 2nd Quarter for the US Economy…
Andover, Massachusetts July 30th2010 – Data released today by the government shows continued growth in the US economy but at a slower pace then expected or hoped for. After GDP increased by 5% in the 4th quarter of 2009 economists were hoping that the worst was behind us and the US economy would be shake off the recession and start growing again. However, the 1st quarter of 2010 saw a lower growth rate and today the Commerce Department reported that GDP grew by 2.4% in the 2nd quarter, much lower than expected and not enough to spur consistent job growth.
Reasons for this unexpectedly slow growth rate include continued high unemployment, very tepid consumer spending growth, as well as a growing trade deficit which is hurting our manufacturing industry and other export industries. Although this news gives some credibility to economists who fear a double dip recession, there is also some positive news to report. Businesses increased their spending on software and hardware upgrades by a huge 21.9%, indicating business are expecting the economy to turn the corner and are thus getting ready for increased growth. Home and commerical builders also posted some impressive numbers in the 2nd quarter with commerical building projects increasing by 5.9% and residential buildings increasing by a government aided 27.9%. Another interesting number to keep a track of is our personal savings rate as consumers. Before the recession, our savings rate was close to 0% with some quarters even showing a negative savings rate. As soon as the recession hit, this rate started to creep up, and last quarter it reached 6.2% of all disposable income, the highest it has been in a year. This is indicative of the continued high unemployment and limited job security. But, it could also indicate a fundamental shift in how Americans use and save their income.
The numbers we are reporting each week show continued ups and downs. No one, not even the Fed Chairman Ben Bernanke really knows where our economy is headed which is weighing down on all the important economic indicators. Stay tuned for more updates and to follow the pace of recovery in the US.
Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.
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