After five years of quantitative easing, growth is still not robust, coming instead in spurts and fits.
San Francisco, CA (PRWEB) May 24, 2013
The Lending Circle, a division of Sunovis Financial, helps small businesses gain access to capital and keeps close watch of economic information that will affects its clients. Economic data in the U.S. continues to send mixed messages, with this week’s offerings pointing to some contractions in global demand. New York manufacturing activity as measured by the New York Federal Reserve’s Empire State Index was shown to have slowed in April and factory output dropped as well, both signs of slowing demand.
An additional sign of weak growth was put forward when the Labor Department released its Producers Price Index (PPI) (http://www.bls.gov/news.release/ppi.nr0.htm) showing that wholesale prices dropped by 0.7% in April, the largest decline in three years.
“The offshoot of this weak data is that it gives the Fed a reason to continue printing money to prime the economy. After five years of quantitative easing, growth is still not robust, coming instead in spurts and fits,” said Terry Robinson, president of The Lending Circle, a division of Sunovis Financial.
Manufacturing production fell 0.4% in April, though economists had expected a 0.2% decline. The drop in manufacturing production pushed overall industrial output down by 0.5%, more than overshadowing the 0.3% increase the prior month. The drop was also broad based and confirms the data on factory payrolls released earlier in the month.
The continuing Eurozone recession and a drop in Chinese growth are both affecting demand for U.S. exports as is the strengthening U.S. dollar. At the same time, U.S. manufacturers are being hurt by $85 billion in federal spending cuts that took effect in March.
On a brighter note, the retail sector, housing and employment are all showing increasing strength, which should limit any slowdown in the U.S. economy.