Economic Growth Rates: Good News at a Stressful Juncture
The U.S. economic growth rate hit a high that hasn’t been seen since April of 2010, according to Reuters. The annualized growth rate reportedly remained consistent, and the Weekly Leading Index went up to 132.9 by December 27 from its 131.9 level the week before that. According to Reuters, the index showed an annualized growth rate of 1.8 percent, steady with the week before that.
The economic growth news is a bright spot in a somewhat worried economy, as economists bite their nails over the under-target inflation rates, and the Federal Reserve considers the repercussions from its reduction of its bond purchasing stimulus plan. After the Fed cut the $85 billion per month bond-buying program, some economists are concerned with America’s inflation, saying that the low rate could bode ill.
“By committing to stabilizing inflation over the long run, the FOMC is de facto at least partially stabilizing the price level around a trend line. Such a policy should thus reap some of the benefits of price-level targeting,” said a study from the Federal Reserve Bank of New York.
The U.S. is not the only one with a close eye on economic indicators, looking for ways to speed recovery. Europe, with the exception of Germany, has been looking at similar struggles with low inflation, and the European Central Bank has said that it will step in to help with inflation it it continues to remain low in the eurozone.
While the recovery is taking place, experts say it needs to be helped along a bit, especially if the eurozone aims to improve unemployment numbers and in that way give inflation the push it needs to get out of its rut. Despite concerns about low inflation in both the eurozone and the U.S., it’s clear that there’s political agendas as well. Germany is hesitant to aid surrounding countries, and upcoming Fed Chairwoman, Janet Yellen, has stated that upping inflation could have poor public reception.