Slow wage growth hurts the broader economy because consumers have less money to spend. Consumer spending accounts for 70 percent of economic activity. The spike in gas prices has forced many consumers to cut back on discretionary purchases, such as furniture and vacations, which help boost growth.
The economy expanded at an annual rate of 1.9 percent in the January-March period. Many economists believe that growth is only slightly better in the current April-June period.
Recovery summer continues!
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What I find so funny about this news is that it surprised the economists. But than, they were surprised by the whole mess in 2008.
ReplyDeleteI think most consumers are working right now get out of debt and sock some real money aside for the future which continues to look uncertain.