The Economic Situation, June 2014

Have you ever had a car break down just as you felt you were beginning to get somewhere? And had to get out and hitchhike, hoofing it while hoping for a ride? If so, you know what it’s like to have your speed reduced to a crawl and to be hoping for a better ride.

That’s the current situation with the economy.

When the first estimate for 1Q2014 real GDP came in with 0.1 percent growth, one thing was clear: the winter of 2013–14 was really rough. Snow-bound cities, disrupted rail yards, and people stranded on interstate highways for hours do not produce GDP. As shown below, the weak first-quarter data broadened the gap between where we are and where we would like to be, and pulled the 4-quarter moving average down to near 2.0 percent.

This is not the kind of stuff that helps fulfill the American dream.

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