US economy struggles to grow in 1st quarter of election year

Associated Press

WASHINGTON

It was not a great start for the U.S. economy.

With consumers and businesses turning cautious, the U.S. struggled to grow in the first three months of a presidential election year that is shining the spotlight on the economy’s fitful recovery.

Gross domestic product, the broadest measure of economic health, expanded at a paltry annual rate of 0.5 percent in the January-March quarter, the Commerce Department reported Thursday. That is slower than the fourth quarter’s 1.4 percent growth rate and marks the weakest performance in two years.

The good news is that American employers still are adding plenty of jobs, which is expected in the months ahead to fuel an economy that’s still outshining much of the world. But if the global slump deepens, or if jobs lose momentum, it could turn Election Day into a pivotal referendum on the economy.

The poor start to the year did not escape notice among Republicans hoping capture the White House in November.

“Today’s report showing the weakest period of economic growth in two years is the latest sign the Obama economy isn’t working,” said Republican National Committee Chairman Reince Priebus. “Hillary Clinton wants to double down on his failed agenda.”

Democrats said GDP should strengthen going forward, with the country continuing to enjoy the longest stretch of private-sector job growth on record. The U.S. has added 14.4 million jobs over the past 73 months.

Jason Furman, chairman of Obama’s Council of Economic Advisors, said the GDP report showed “there’s more work to do and the president will continue to call on Congress to support policies that will boost our long-run growth and living standards.”

Private economists said that given the severity of the 2007-09 recession, the debate over the economy is certain to take center stage during campaign season. Democrats will point to a jobless rate at 5 percent – considered close to full employment – and expectations that job growth will continue at a solid monthly pace of at least 200,000 in the months leading up to the election.

But Republicans note that annual GDP growth in this recovery has averaged just above 2 percent. That is the slowest pace in the post-war period. Many middle class families are struggling, especially those who lost jobs in the downturn and have had to take on work at lower salaries.