US economy reports weak Q1 growth
Published April 28th, 2007
The worst economic growth in four years is raising concern that troubles in the US housing market will spread and throw the country into a recession before the year is out.
The economy practically crawled at a 1.3 per cent pace in the opening quarter of 2007, the Commerce Department reported on Friday. That was even weaker than the sluggish 2.5 per cent rate in the closing quarter of last year.
The main culprit in the slowdown is the housing slump, which made some businesses act cautiously. The bloated trade deficit also played a role.
Consumers largely carried the economy in the first quarter. But will they stay resilient in light of the troubled housing market, fallout from risky mortgages and rising energy prices?
“The number one question is can the consumer continue to play Atlas while the housing market crumbles around him?” said Richard Yamarone, economist at Argus Research.
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