A litany of special factors exposes the recovery’s fragility
RECOVERIES from financial crises are usually subdued, but America’s is starting to look comatose. On May 26th the government said GDP grew by an annualised 1.8% in the first quarter, identical to its preliminary estimate. Economists had hoped for an upward revision. Worse, as signs of weakness accumulate, forecasters have trimmed estimates for the current quarter from around 3.5% they were projecting a month ago to 2.7% or less now.
Last December an agreement between Barack Obama and the Republicans to extend George Bush’s tax cuts and enact new ones led to forecasts of 3% to 4% growth this year. But the new consensus rate of 2.6%, for a recovery now two years old, is barely above America’s long-term potential and scarcely enough to bring unemployment down. To be sure, the post-crisis imperative for banks and households to reduce their debt meant a V-shaped rebound was never on the cards. Even so, this is a terrible performance.
Economists have found themselves repeatedly making excuses. First it was the snowstorms. Then it was Japan’s earthquake, tsunami and nuclear disaster which crimped the supply of parts to car assembly plants in America. Then, as the snow melted, floods ravaged Arkansas, Mississippi, Missouri and Tennessee, and tornadoes battered Alabama and Missouri. America has suffered five incidents of extreme weather this year, each inflicting at least $1 billion in damage.
The most important special factor has been petrol. Prices jumped from $3 per gallon at the end of December to $3.90 in early May. That has siphoned off much of the purchasing power that consumers should have extracted from December’s tax agreement and subsequent gains in employment. Total consumer spending rose at just a 6.7% annual rate in the three months to the end of April, but most of that increase was eaten up by inflation. Real spending grew by a paltry 2.2%.
Still, Wall Street expects the economy to perk up in coming months as those special factors begin to fade. Petrol prices have slipped in the past three weeks as monetary policy has tightened in emerging markets. Employment seems still to be rising, albeit at a slower rate. (May figures were to be released after The Economist went to press.) And rebuilding after the floods and tornadoes may deliver a fillip in the second half of the year.
Yet if one-offs can so easily depress growth, that only underlines how fragile the economy’s underpinnings are. More evidence of that fragility came in the GDP report’s sharp downward revisions to households’ real after-tax incomes in late 2010 and early 2011. It now appears that consumers have maintained their sluggish pace of spending only by saving less. Since GDP measured by income should equal GDP measured by spending, the poor income data suggest the GDP figures may have to be revised down.
To make matters worse, house prices in March fell to a new post-crisis low. Betsy Graseck of Morgan Stanley reckons they’ll fall another 10% to 12% over the next year. That is only one of many reasons she says banks are cautious about lending: they are also facing tougher scrutiny of their underwriting by regulators and buyers of their mortgages.
在5月，房价降到了后经济危机时期的新低，这使得问题变得更糟糕。摩根史坦利公司的Betsy Graseck估计房价在未来的一年里会再下降10%到12%。这只不过是Betsy Graseck所支出的多个关于银行为什么对惜贷的原因中的一个：另外，银行还面对审查者和他们的抵押贷款购买者的严厉审查。
Both Mr Obama and the Republicans are casting about for cheap ways to boost the economy. On May 26th the White House announced it had found several hundred rules it could eliminate or scale back. The same day, Republicans released a collection of mostly sensible ideas such as passing free-trade agreements and clearing the patent office’s backlog. But their main plank is that the federal government slash spending. “Families are tightening their belts and sticking to a budget—and Washington should too,” said Eric Cantor, the Republican majority leader in the House. Maybe so, but spending less when households are in no shape to pick up the slack seems a sure-fire way to keep an anaemic recovery off-colour.
奥巴马和共和党人士都想构造出重振经济的廉价方法。5月26日，白宫方面宣布它可以废除或者缩减几百条条款。同一天，共和党人士发布了一系列最令人敏感的想法，比如通过自由贸易协议和清除专利局积压的专利。但是，他们主要的政纲是消减联邦政府支出。白宫里的共和党多数派领导Eric Cantor指出： “家庭们正为他们的债务勒紧裤腰带，同时严格遵守自己的支出预算，所以政府也应该这么做。”也许是这么做是对的，但是当家庭们还没有收起怠惰的状态的时刻就消减政府支出似乎是一个使原本就没什么活力的复苏继续萎靡的可靠选择。