The Federal Reserve Bank of Atlanta just slammed the door on the forecast for the economy, projecting zero growth for the first-quarter of 2015.The Federal Reserve Bank of Atlanta had predicted in February that the growth projection would be 1.9 percent for the first three months of the year.
The official first-quarter growth data is not going to be released until April 29, but the cut down to zero for an estimate does not bode well for the still struggling economy. 2015 was due to be the year America started off strong and showed that the US economy is again the world leader, but the economists and others are not holding their breath at this notion. For quite a few months, both the business sector and private sector have not been spending money as they should. Most businesses and people are saving their money, instead of putting that money back into the economy. This is part of the reason why the economy has not been growing, since people are more apt to hoard the money they have in their possession.
Retail sales have been down lately, home sales and home construction have also been down, and people are not even buying the small things these days. Economists thought that the super low gas prices would help jump start the economy, and have people pumping that extra money into purchases they have been putting off. As of right now, the steady low gas prices haven’t made anyone, either businesses or households, feel comfortable enough to feed that extra money into the markets. The orders for durable goods have also fallen quite a bit in the past three months. Durable goods are things like appliances and furniture, and all of the household items that people use and need to replace every so often.
The strength of the dollar has made it more expensive for people to buy American products in other countries, which is harming businesses. Every time someone purchases something overseas, the amount of money the company gets back goes down due to the currency exchange. Industrial and manufacturing production has been down partially because of the strong dollar and lack of opportunity overseas.
Although it sounds like things are off to a rough start, it does not mean that the economy in America can’t bounce back in the coming months. The same start happened last year, but there ended up being over 2.4 percent growth overall in 2014. A lot of the economists are still predicting that the economy will grow more than in 2014, although it might take a while for that growth to happen. Friday the jobs report comes out, which will also help economists get a better look at what might be in store for the rest of the year. The economists are hoping that the job growth is at least 200,000 because if the number winds up being less than that, then the economists might have to redo predictions for 2015.