Slow Economic Growth Weighs Down Summer

Experts Believe Federal Reserve Will Not Change Interest Rates in Aug.

(AP)  The country slogged through slower economic growth and rising prices during the summer, packing a double whammy to people and businesses alike.

The Fed's new snapshot of business conditions, released Wednesday, also underscored the challenges confronting Federal Reserve Chairman Ben Bernanke and his colleagues as they try to get the economy back on track.

For now, many economists predict the Fed will probably leave a key interest rate alone when it meets next on Aug. 5 - given all the economic crosscurrents. Boosting rates to fend off inflation would hurt the fragile economy and the already crippled housing market. On the other hand, the Fed isn't inclined to lower rates because that would aggravate inflation.

Growth and inflation barometers turned worse in the summer, according to the Fed report. Some worry that the country may be headed for a bout of stagflation, that toxic combination of stagnant growth and stubborn inflation last seen in the 1970s.

Bernanke has said, however, that he doesn't believe the economy will suffer from stagflation.

Information from the Fed's 12 regional banks around the country suggested that "the pace of economic activity slowed somewhat since the last report" issued in June, the Fed report said.

Consumer spending - the economy's lifeblood - was reported as "sluggish or slowing" in nearly all the 12 Fed regions, although the government's tax rebate checks spurred sales for some items, especially electronics. Sales at many other stores, particularly for housing-related goods, were typically characterized as "weak or falling," however.

Looking ahead, "the outlook for retail activity was also generally downbeat," the Fed report said. Sales expectations were described as "grim" among retailers in the Dallas Fed region and "subdued" in the Atlanta region.

Auto sales, meanwhile, were characterized as "almost uniformly weak" across all Fed regions. Sales were especially poor for gas-guzzling SUVs, trucks and some minivans.

[cheetah-man7]

Can any of us really be surprised to hear this news? Come on folks... we may not see a depression per se, but we really do need to re-think our priorities and start a program to rid ourselves of debt, excessive consumerism, etc... Start thinking seriously about less driving, less spending, less eating out, less clothes and other unecessary goodies that we can''t seem to say no to. Start thinking too about more savings, more restraint in spending and travelling. Things might feel tight, but in the end, those who are better prepared will fare much better when all is said and done.

[randynason]

Bernanke is as good a spokesperson for the "sagging" economy as the FDA is for the recent tomato and pepper fiasco. What''s wrong with these people? They just can''t seem to get anything right. I suppose they have no appropriate role model to emulate, or maybe they''re busy getting their applications for pardon together, for Bush to sign.

[sistatee-2009]

The people that are going to put the economy "back on track" are the same people that took it OFF THE TRACK; the STINKING FEDERAL RESERVE!

[occams_taser]

If President Bush hadn''t felt the urge to kill poor Iraqis who lacked clean running water we''d have the resources to improve the USA. But instead we blew the money on killing.

[ontheleft]

What "slow economic growth" are they talking about? Sales in luxury goods and services are booming. Nannies, butlers and chauffeurs are hot careers. Quit your current job and start working for the rich. That is where the money is in this economy.

[mcv57]

Does anyone know why the oil prices are dropping. Please, no cracks about Bushwacker help the situation. I would believe a covert-operation arrested siezed the Goldman & Sach''s speculative practices; forget about the FBI and SEC (overpaid crooked cops).

[mcv57]

Posted by ontheleft

Lots of minimum wages jobs, if you like renting a basement as your permanent residence. You figure $12.00 per hour management job at Mickey''s is only $6.00 in reality - government taxes takes 50%. This economy is one big tent sale.

[demwatcher]

While the Republicans were in control of congress, my retirement portfolio gained an average of 11 percent a year from my investments.

Since the Dems took over, I''ve lost 5 percent of it''s total worth.

I know who NOT to vote for. I want to survive comfortably after I retire, and the Dems just are not capable of helping me.

While Iraq, Iran and other international situations are important, my bottom line is my financial security.

Obama and the Democrats ARE NOT for me.

[ubrew12]

DemWatcher said: "While the Republicans were in control of congress, my...[investment] portfolio gained... 11% a year. Since the Dems took over, I''ve lost 5% of it''s total worth."

Tax cuts and loose credit have immediate benefits for Wall Street profits. The resulting debt and devaluation of the dollar comes later, whether Dems or Repubs are in charge. Debt leads to eventual payment, which affects profits and your portfolio.

You made 11% a year? Isn''t that the same amount the dollar has dropped by? Sounds to me like you broke even.

Anyone can buy a good economy using a credit card. Sorry you bought into it.

[skyk-2009]

The people that are going to put the economy "back on track" are the same people that took it OFF THE TRACK; the STINKING FEDERAL RESERVE!

Posted by SistaTee at 04:29 PM : Jul 23, 2008

Now that just is not true and everyone knows it. It was George W. Bush and the Republican Party that was handed a Balanced Budget and a Surplus... OH to have the surplus now huh?! Regardless the economic mess has to be placed right at the feet of the People and the Party that took ALL those regulations off the Lending Banks as well... No it is finally time the Republican''s accepted responsibility for what they have done.

[mrbrill]

DemWatcher said: "While the Republicans were in control of congress, my...[investment] portfolio gained... 11% a year. Since the Dems took over, I''''ve lost 5% of it''''s total worth."

Uhhh, you have to be kidding. The Democrats were handed a failing economy... I look at it this way. Since Bush and Repugs took over in 2001, the Dow index is at about a 1% growth. (Dow opened at 10,790.92 on Jan 2, 2001 and closed today at 11,632.38. If Dow closes this year at 11685.02, that would be a 1% growth per year.)

[lochlan-2009]

Do we keep the dollar down and commodities (oil) and inflation up, or do we push wreckless mortgaged new home buyers out of their houses?

I think the IRA''s, hedgefunds, etc.(speculators) have made enough cash for the upcoming baby boomer retiree''s at the expense of all. Not to mention the 100%plus $$$ increase for houses during the bubble, (mostly owned by this age group) these people made off the next generation, by the Fed lowering the interest rates so low these houses could shoot to the moon in cost, yet still be affordable.
Let''s pass the bill that bails out the wreckless mortgagees and their banks (who made way to much money on the scam), raise the interst rate, which brings up the value of the dollar (and Americans global wage worth), which brings down the value of commodities,(oil, and also unfortunately flatens houses worth for a couple years). A stimulus package before christmas, twice that of the last one, would probably keep the responsible afloat. Tax Payers get the bill. Then GM can buy the patent for NiMH batteries from Chevron with McCains $300million x-prize, and we can all start driving electric in 2010, the age of green, at $5 a charge.

Oh yeah, if you didn''t see, GM stock shot up almost a 100% this past week from a $8.81 low, before profit takers took it down a notch. Not news worthy on CBS, CNN, ABC, FOX.

[rudy654-2009]

While the Republicans were in control of congress, my retirement portfolio gained an average of 11 percent a year from my investments.
*************

So, what was it before BUSH took over? DUH! It must have been really bad. Says the dittohead.

[randynason]

The Repugnicans are having one helluva trunk sale, this year. I imagine this fecal matter will be going on for the next six months, at the very least. And, hey- How ''bout that Bush legacy?!

[gslinger3]

If CBS will notreport it, we will!

July 23 (Bloomberg) -- Crude oil futures fell below $125 a barrel for the first time in seven weeks after a U.S. government report showed that fuel stockpiles increased as consumption tumbled to the lowest in more than a year.

Come on CBS, report the *** news!

NOBAMA 08!!!! WWJWD "What would Jeremiah Wright do?"