Economy Growth Slower than Expected due to Limited Family Spending
According to economists, the recession is over. Ask your neighbor, and you might get a different response. When the economy bounced back after previous U.S. recessions, consumers responded by spending again. However, a family on a budget nowadays is still restricting their family budget spending, which in turn is preventing the economy from bouncing back.
Obama’s stimulus package issued last year was supposed to stop the economy’s spiral down from a recession into a depression and instead spur businesses to expand. This in turn would restart consumer spending and increase family expenses. The first desired effect was produced – but only for a small amount of time. To be specific, spend increased only in the first quarter of this year.
According to measurements from the Gross Domestic Product, economic growth peaked during the last few months of 2009 but cooled off during the first half of this year. The family budget is still not going as far as it once did, and families are weary of overspending and then having the economy turn bad again.
Because of this fear, economists have edged their original expectation of 3% economic growth this year down, but no one is saying a “double-dip recession” is going to occur.
Although the economy is slowly recovering, the family budget is still tapped out due to unemployment, the bust of the housing boom and the overabundance of bank lending which has put millions of American households into debt.
And according to the stats, the family budget is not going to be profiting from new jobs as opportunities for those that got laid off; at least not until 2016.
