US economy is losing momentum
Associated Press
WASHINGTON
Consumers, fueled by job growth, cheaper gas and higher home values, would drive the U.S. economy through a global slump.
That was the widespread hope just a few months ago. Now, doubts are growing that the United States can withstand economic pressures flowing from overseas. Economies in China, Canada, Brazil and Europe are struggling. Canada, the largest U.S. trading partner, is in recession.
Americans have been holding back on spending even though lower gas prices have put more cash in their pockets. Employers have slowed hiring and held down pay. Home sales have flattened. And the U.S. economy has been hobbled by a stronger dollar, which makes U.S. goods costlier overseas and is depressing corporate profits.
“There’s no question that the economy is losing momentum,” said Mark Vitner, an economist at Wells Fargo. “The question is whether it is temporary ... or is it something that will prove more lasting?”
As recently as early August, economists had sketched a bright picture for the rest of the year and, as a result, thought the Federal Reserve would be confident enough to raise interest rates from record lows in September. The Fed chose not to. And many economists and investors have pushed back their forecast for a Fed rate hike into next year.