Economic growth slowed to a crawl

The government reported today that the economic growth for the U.S. is at 1.3% which is it’s slowest pace in 4 years. This reading was far worse than economists expected. As expected, the housing issues have caused consumer spending to pull back significantly. Economists had hoped the real estate market’s affect on the GDP would have reached it’s peak but this is a clear indication that it has not.

However, with a rise in inflation from 1.8% to 2.2% it is anybody’s guess whether this will cause the FED to drop interest rates. There will undoubtedly be much anticipation as the next FED meeting approaches. A drop in rates could ease the housing market tension and stimulate economic growth. Keep your fingers crossed.

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