Consumer spending rose at an anemic pace in January, adding to concerns that the national economic growth is slowing. The Associated Press reports,
U.S. consumer spending edged up a tiny 0.1 percent in January, while incomes advanced a modest 0.2 percent in February, further evidence that economic activity may have decelerated after strong growth for most of last year.
The Commerce Department said Friday that the weak gain in consumer spending followed a 0.6 percent plunge in December that marked the biggest one-month drop in more than nine years.
We’ve cataloged concerns: Slower growth in the Metro Puget Sound, business economists anticipating a recession in the next two years, disappointing jobs reports, and downward GDP revisions.
The AP story continues,
Many analysts believe the economy has entered a soft patch and that growth is significantly slower in the current quarter. The U.S. faces various headwinds, including weakness overseas and the waning effects of the 2017 tax cuts.
The government on Thursday revised down gross domestic product growth to 2.2 percent in the fourth quarter. Consumer spending, which accounts for 70 percent of economic activity, is a major reason for the slowdown.
Yet House Democrats have proposed substantial spending – an $8 billion increase – in the coming biennium, supported by substantial business tax increases. And the Washington Research Council reports amendments made to the original proposal actually boosted spending further, tapping the rainy day fund.
Business leaders have counseled lawmakers:
Layering on additional, unsustainable spending and further burdening employers could prove short-sighted when the economy slows and Washington is left with inadequate reserves, unable to pay for what was promised, attract new investment or spur job creation.
… The Legislature should look beyond just the next two years and work to protect against an economic slowdown that is sure to come.
Good advice.
