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US Growth Slows as Government Cuts Weigh
By David Robertson
Times.co.uk
The American economy grew by less than expected in the first quarter, prompting concerns that tax increases and spending cuts could smother the country’s recovery.
GDP for the United States grew by 2.5 per cent in the first three months of this year, which was far stronger than most Western countries achieved. Britain, by comparison, grew at a rate of just 0.3 per cent.
However, the US growth rate was lower than the 3 per cent that economists had predicted and there are fears that the economy may be sliding back towards mediocre growth.
There has been a pattern in the last two years of strong growth at the start of the year followed by an economy that loses steam. GDP grew by only 0.4 per cent in the final quarter of last year, for example.
Economists are concerned that growth this year will be impacted by higher taxes and cuts to Government spending as Washington attempts to deal with its fiscal deficit.
Consumers have so far shrugged off an increase in the payroll tax at the start of the year but hiring has slowed.
In March, only 88,000 jobs were created as the public sector shed staff and private companies continue to hold back on spending until the impact of Government cuts is determined.
The post US Growth Slows as Government Cuts Weigh appeared first on Midas Letter.
2013-04-26 12:16:40
Source: http://www.midasletter.com/2013/04/us-growth-slows-as-government-cuts-weigh-1304263/
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