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Potential headlines about the start of a recession--two consecutive quarters of economic contraction--were forestalled as the GDP eked out 0.6% growth in the first three months of the year. CBS' Anthony Mason saw a "struggling economy barely running in pace" while CNBC's Erin Burnett called the numbers "weak" on NBC. "The economy may not actually be shrinking but it feels that way to many." Burnett told us the "#1 thing" that must happen before strong growth resumes: "House prices--they need to stop falling."
ABC's Betsy Stark (embargoed link) concentrated on the Federal Reserve Board's efforts at monetary stimulus. The economy has "essentially flatlined," she declared: "Consumers are spending less; the job market is soft; housing is weak; financial markets are under stress; inflation is on the rise." Apart from that, as they asked Mrs Lincoln, how did you like the play? Short term interest rates have been cut to 2.0% from 5.25% in just eight months but mortgage rates "have barely budged." That same time span has seen the US dollar lose 12% of its value, driving up the cost of imports: "The twin threats of recession and inflation have left the Fed in a terrible bind."
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