The U.S. economy shrank in the first quarter for the first time in three years as businesses increased inventories more slowly than initially believed and bad weather hampered activity.
Although the first-quarter contraction represents a serious pothole, especially for people looking for work or forced into part-time employment because full-time positions are unavailable, it doesn’t suggest a recession is on the horizon.
The on-again, off-again pattern of economic expansion in the current recovery explains why so many Americans remain skeptical that things really are getting better. The worst recession since the Great Depression ended in June 2009, but the economic recovery has struggled to gain traction. Job growth has been largely lackluster even as the unemployment rate has slowly fallen. Sluggish wage growth has restrained consumer spending.
Pending home sales for the month of April plummeted 9.2% compared to April 2013, the National Association of Realtors reported Thursday. The OCAR preview meeting this morning had only 14 listings compared to an average of about 24 this year.