Growth slowdown seen in U.S. as recession dodged

Obama Administration

The administration, seeking to blunt the political impact, highlighted private payroll gains over the past 27 months while promoting measures Obama has proposed to boost hiring.

The decline in jobs growth to 69,000 last month from a high this year of 275,000 in January was reminiscent of the labor- market cooling that occurred in both 2010 and 2011. Then as now, employers turned skittish as Europe’s sovereign-debt woes worsened.

Repeating the pattern of the last two years, Fed Chairman Ben S. Bernanke and his fellow central bankers are likely to respond to the job-market weakness by announcing further steps to stimulate growth. The moves could come when the Fed meets on June 19-20 to decide monetary strategy, Feroli said in a note to clients. Bernanke may give a hint of the Fed’s plans when he testifies to Congress on June 7.

Policy makers elsewhere face even more pressure to come up with ways to boost their economies. The European Central Bank may cut its benchmark interest rate from 1 percent as soon as this week, Holger Schmieding, chief economist at Berenberg Bank in London, said in a June 1 report. China will respond with a 2 trillion yuan ($314 billion) fiscal stimulus this year and next, according to Donald Straszheim, senior managing director of New York-based ISI Group.

‘Better Shape’

Sinai said the U.S. is in “better shape” to weather the global economic tremors than it was in the past, and in comparison with other countries today, provided the euro region’s currency compact doesn’t collapse completely. He sees U.S. growth picking up to 2.5 to 3 percent in the second half of this year as consumer spending expands, encouraging employers to take on more workers.

Household purchases rose 0.3 percent in April, the Commerce Department reported on June 1. That followed a 2.7 percent annualized increase in the first quarter, the most since the final three months of 2010.

Demand is holding up at store chains. Retailers’ same-store sales topped analysts’ estimates in May. Sales at Minneapolis- based Target Corp., the second-largest U.S. discount retailer, climbed 4.4 percent. Framingham, Massachusetts-based TJX Cos., the owner of T.J. Maxx and Marshalls, posted an 8 percent increase, reports showed last week.

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