Monday, February 10, 2014

US economy may be stuck in slow lane for long run

In the 4 1/2 years since the Great Recession ended, millions of Americans who have gone without jobs or raises have found themselves wondering something about the economic recovery:

Is this as good as it gets?

It increasingly looks that way.

Two straight weak job reports have raised doubts about economists’ predictions of breakout growth in 2014. The global economy is showing signs of slowing—again. Manufacturing has slumped. Fewer people are signing contracts to buy homes. Global stock markets have sunk as anxiety has gripped developing nations.

The Congressional Budget Office foresees growth picking up through 2016, only to weaken starting in 2017. By the CBO’s reckoning, the economy will soon slam into a demographic wall: The vast baby boom generation will retire. Their exodus will shrink the share of Americans who are working, which will hamper the economy’s ability to accelerate.

At the same time, the government may have to borrow more, raise taxes or cut spending to support Social Security and Medicare for those retirees.

Full article: http://www.cnbc.com/id/101402528



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