Wednesday, August 01, 2012

Economy may be stuck in slow-growth mode for a long time

Central bankers are considering more steps, including possibly buying more long-term bonds to keep interest rates low. But those measures are not expected to be announced when the Fed issues a policy statement Wednesday. So for now, it's wait and hope.

The latest data on gross domestic product highlight the Fed’s long-term quandary. Though growth has slowed sharply from a burst late last year, the expansion continues to chug along at an anemic 1.5 percent annual pace.

That growth avoids the technical definition of recession. But the sluggish pace of hiring makes it feel like a downturn for the 12.7 million American workers still sidelined.

And some experts believe the economy may be permanently stuck in slow-growth mode.
Read the rest here.

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