Signs point to slowing of growth

Associated Press

WASHINGTON

The economy is tiring again.

Reports Wednesday on manufacturing and company hiring were so weak that many economists immediately downgraded their forecasts for Friday’s jobs report for May. Some analysts also slashed their estimates for growth in the April-June quarter.

“We’re definitely in a soft patch,” says Steve Blitz, senior economist for ITG Investment Research.

No one knows whether the slowdown is a temporary setback or the start of a prolonged period of anemic growth. Many analysts hold out hope that the economy will rebound in the second half of 2011.

They say some of the problems restraining growth now — high oil prices, U.S. natural disasters and supply disruptions from Japan’s earthquake — likely will prove temporary. And they recall that the economy shrugged off a similar midyear slowdown in 2010, in part because the Federal Reserve embarked on a program to keep interest rates at historic lows.

But for now, signs of a more sluggish stage of the economy are spreading. The Dow Jones industrial average plunged nearly 280 points, or 2.2 percent, wiping out more than one-fourth of the year’s gains.