Fed: US Economic Recovery Is Not Interrupted

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< p > "first quarter a href=" http://www.91se91.com/news/index_c.asp "> GDP < /a > atrophy is mainly due to severe cold weather and reduced inventory." Ethan Harris, head of Merrill Lynch economic research at Bank of America, said in an interview with "First Financial Daily". "We still believe that the economic situation has improved and there will be very good economic growth next," Ethan Harris said.

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< p > in the past winter, the severe cold weather in the history of the United States appeared, and it was very long, which led to a sharp reduction in the operating rate and inventory.

Real estate construction activities were affected.

Business investment in buildings has dropped by 7.5%, and real estate investment has dropped by 5%.

In addition, the pace of replenishment of US companies in the first quarter was only $49 billion, while in the latter two quarters of 2013, business inventories in each quarter increased by more than $100 billion.

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< p > Harris believes that the international and domestic a href= "http://www.91se91.com/news/index_c.asp" > economic environment < /a > is more favorable for growth, and the two quarter GDP should be substantially improved.

"There is no international crisis, the eurozone and emerging markets are bounces," Harris said. "There will be no fiscal austerity in Washington, and the risk of closing the door, and there will be a faster economic growth in the future."

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Charlie Henberg Himmelberg, head of global credit strategy research at Goldman Sachs, believes that the first quarter GDP reduction is clearly seasonal and not a sign of recession in P Charles.

"We should maintain confidence in the economic recovery," Henberg told reporters.

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Mori Harris, chief economist of P UBS, also told reporters that the second quarter's economic cut of 1% was indeed unexpected. But there will be strong growth in the second quarter, and in the process of economic recovery, the growth of GDP will fluctuate more often than not in the second quarter of P.

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In P, April, the national wage growth was only 0.2%, the weakest growth in a year.

Excluding inflation, wages and income growth increased by 2% a year ago.

Moreover, consumer spending in April declined for the first time in a year.

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< p > however, the background of this data is that personal consumption increased by 0.5% in March. Since Obama and health care reform bill launched in March, those who purchase medical insurance have increased personal expenses.

In addition, gas consumption in cold winter is also a major pillar of personal consumption expenditure in the past 3 months.

The warmer weather and lower fuel costs in April also contributed to a drop in consumer spending.

Just released the May strong car sales data also showed that the economic recovery did not stop.

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P sales increased 11.4% to 1 million 610 thousand cars in May, the fastest growth since February 2007.

The Fed's Brown book also points out that consumer spending is expanding in almost all areas.

More than half of the regions reported that car sales, especially sales of new cars, increased steadily.

Consumer spending on tourism has contributed to the rebound in the economy, especially the East Coast Tourism Expenditure.

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< p > the labor market continued to improve, and the unemployment rate in April was 6.3%.

The Brown Book pointed out that employment in most areas is "steady to stronger", and in several regions it is difficult for companies to find skilled workers.

Companies near Philadelphia say they are cautious about this.

The struggle for workers in Kansas is increasing.

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< p > however, although the labor market has improved, it has not been able to plate into wage growth.

The wage growth in April was only 0.2%.

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< p > "historically, wage growth tends to lag behind the improvement of the labour market."

Mori Harris said.

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< p > Ethan Harris believes that although the labour market has improved, it is not enough to give workers bargaining power. That is to say, the benefits of economic recovery have not been felt by most American workers.

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< p > strong > growth rate is better than that of a href= "http://www.91se91.com/news/index_c.asp" > interest rate < /a > /strong > /p >

< p > the US economy grew strongly in the second half of last year. The Federal Reserve expects GDP growth in 2014 to be 3%.

However, GDP fell by 1% in the first quarter, and people doubted whether it could achieve 3% economic growth this year.

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< p > "I think this goal is hard to achieve," Ethan Harris said. "The GDP growth in the second quarter is likely to be between 3%~4%, and the reduction in the first quarter is not very satisfactory.

We estimate that the annual GDP growth is still around 2.5%.

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< p > while Mori Harris and Henberg believe that there will be a big rebound in the two quarter of GDP, and the 3% growth in the world is still possible.

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Economic fluctuations such as "P", stagnation and growth also make the fed in a difficult position.

Last year, when the economic outlook looked good, the Fed began to reduce the scale of quantitative easing.

However, GDP's contraction in the first quarter also made some doubts about the continued reduction of quantitative easing.

But most economists agree that the Federal Reserve will continue to shrink this way.

But the Fed will not rush to consider raising short-term interest rates before it has a clearer understanding of the economy, the labour market and inflation. Most Fed officials expect to raise short-term interest rates in 2015.

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< p > "at present, the Fed is concerned about the growth of GDP," Mori Harris said. "Raising interest rates will happen in the second half of 2015. The bond market is expected to rise in early 2015."

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