This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Morici: GDP Up Only 0.1%, Bodes Poorly for Jobs Creation

NEW YORK (TheStreet) -- The Commerce Department reported the nation's gross domestic product grew at a disappointing 0.1% annual rate in the first quarter, less than 2.6% and 4.1% recorded the prior two periods.

Overall, it appears 2014 may not be the breakout year President Obama and many Wall Street forecasters predicted, boding poorly for jobs creation.

A colder-than-normal winter slowed consumer spending somewhat, and business investment in new equipment, structures and information technology plunged. But factors other than weather dragged on growth, too.

Sequestration and the longer-term shift in federal spending from activities that support growth, infrastructure, research and development and the like toward social welfare, health care subsidies, food stamps and the like are depressing federal and state spending, investments, and productivity, and ultimately are dragging down aggregate demand and growth.

Must Read: Sterling's Intransigence Heightens Pressure on Clippers' Sponsors

The harsh winter slowed residential sales and construction, and recent builder surveys indicate new home purchases may not rebound as strongly this spring and summer as once expected.

Young, first-time home buyers are caught in a vice: lower incomes than their parents had when they entered the labor force along with heavy college debt. Consequently, as many finally leave their parents' homes to set up households, more chose apartments.

Construction costs associated with apartment rentals are less than the suburban homes their parents might have purchased and create fewer multiplier effects in the furniture, appliance and home-improvement sectors. Also, apartment activity in existing cities and suburbs likely instigates less complementary commercial development than new suburban subdivisions do.

Simply, it's time for the Obama administration to pay the piper for using student loans to prop up demand and keep young adults out of the job market to inflate growth and suppress the unemployment rate over the last five years. Fewer housing starts and more focus on lower cost units don't bode well for growth.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%
YHOO $36.67 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs