Economic Growth

Wondering why government can't restart the sluggish economy? Well, one reason is that we are still paying the price for the greatest blunder in domestic policy since World War II. This occurred a half-century ago and helps explain today's policy paralysis. The history — largely unrecognized — is worth recalling. Until the 1960s, Americans generally believed in low inflation and balanced budgets. President John Kennedy shared the consensus but was persuaded to change his mind.

WASHINGTON — U.S. manufacturers cut back on production in April, as auto companies cranked out fewer cars, factories made fewer consumer goods and most other industries reduced output. The weakness suggests economic growth may be slowing. The Federal Reserve said Wednesday that factory output dropped 0.4 percent in April, the third decline in four months. Production of autos and auto parts fell 1.3 percent in April. The drop is likely temporary because automakers are reporting...

U.S. economic growth accelerated from April to June as taxpayers spent their federal rebate checks and a weakened dollar boosted exports, the government reported yesterday. According to new data from the Commerce Department, gross domestic product grew at an annualized rate of 3.3 percent in the second quarter of the year, the fastest rate since mid-2007. The department had initially estimated annualized growth for the period to be 1.9 percent, but more complete data -- particularly on exports by U.S. companies -- showed the economy...

MUMBAI, India — India says its industrial production for March grew at a faster pace after a slowdown the previous month. The new figures offered some good news for Asia's third-largest economy amid worries over stalling economic growth. The country's statistics office said Friday that March industrial output was 2.5 percent higher than a year earlier. It grew 0.6 percent in February. Manufacturing growth of 3.2 percent led the improvement. But growth in industrial production...

BEIJING, Jan. 22 -- China's economic slump deepened in the final quarter of 2008 as the impact of the global financial crisis spread, according to data released Thursday, adding to the threat of more heavy job losses and possible unrest. Economic growth plunged to 6.8 percent compared with a year earlier, the National Bureau of Statistics reported, down sharply from 9 percent the previous quarter. "The international financial crisis is deepening and spreading, with continuing negative impact on the domestic...

Don't be fooled by economists' predictions of slower economic growth during the fourth quarter. The forecasts mask what many believe is a pretty solid recovery. The government will release its first estimate of the nation's gross domestic product Wednesday morning, and the consensus prediction is for a paltry growth rate of 1.1 percent. Some are expecting growth to slow to as little as 0.4 percent — barely above stall speed. But dig a little deeper, and the picture is not so grim.

As Republican leaders urge a steep and swift reduction in government spending, they are making an un­or­tho­dox argument: that these cuts would strengthen economic growth not only in the distant future but almost immediately. That view is at odds with many of the nonpartisan groups that analyze the economy. Research departments of leading banks and agencies such as the Federal Reserve and the Congressional Budget Office warn that deep cuts would come at the cost of weaker growth and...

SAN FRANCISCO — Americans are weighed down by debt, and Europe is in crisis. So Asian nations need to step up and encourage their citizens to spend so that they can help drive global economic growth, a senior Federal Reserve official said Tuesday. With consumer demand in the United States and other advanced economies hampered by economic troubles, "I believe it is crucial for emerging market economies, particularly in Asia, to take further steps to boost domestic demand, providing support for...

BRUSSELS — European leaders said Friday that they are on the way to bringing the continent's debt crisis under control and pledged to increasingly refocus their efforts on reviving the economy and fighting unemployment. The shift in emphasis, at a summit of the 27-nation European Union, was seen as an attempt to respond to growing criticism that a seven-month stretch of relentless budget-cutting has gone too far in slowing European economies, causing unacceptable hardships and putting more than 10 percent of...

The pace of global economic growth is slowing and the major developed nations continue to pose the major threats as they battle with high debt and below-par growth, the International Monetary Fund said Wednesday in its latest world forecast. The IMF forecasts world growth of 3.5 percent for 2013, slightly less than the organization projected in its previous report in October. In a news conference, IMF chief economist Olivier Blanchard said he thought current conditions warranted "some cautious optimism"...

WASHINGTON — Wholesale businesses stepped up their restocking of supplies in March, but their sales fell sharply. The Commerce Department said Thursday that stockpiles held by wholesalers rose 0.4 percent in March compared with February, when they had fallen 0.3 percent. Sales in March dropped 1.6 percent, the biggest setback since March 2009, when the country was in recession. Sales had risen 1.5 percent in February. Inventory rebuilding can be a positive for economic growth...

DOWN, DOWN UNDER: Australia's central bank cut its key interest rate by a quarter percentage point to a record low 2.75 percent Tuesday in an effort to boost economic growth. AUSSIE OPTION: The country's Treasurer said inflation is under control, so the central bank is in a position to deploy monetary policy, particularly when faced with a high Australian dollar. BILLABONG BONDS: the Australian dollar remains high because of demand for government bonds, viewed by investors...

The May 4 Business article " Shift in economy delays recovery " confirmed that demand is the real engine of growth. The finding also undermines the recent, fallacious argument that debt reduction is a precursor to growth. Businesses don't spring to action upon anticipating changes in the climate, be they at the microeconomic level, such as lower interest rates and reduced taxes, or the macroeconomic level, such as lower government debt and a...

JAKARTA, Indonesia — Indonesia's economic growth slowed to a still robust 6 percent in the first quarter of the year as business investment weakened and mining output decreased. Statistics Indonesia said Monday that the growth rate was down from 6.1 percent in the final quarter of 2012. Indonesia is Southeast Asia's largest economy with annual gross domestic product of almost $1 trillion. Analysts at Barclays said in a commentary that consumer spending was the main pillar of growth but...

A steep slowdown in defense spending tied to the end of the wars in Iraq and Afghanistan is undercutting the country's economic recovery, new government data released Friday revealed. The report showed gross domestic product grew at an annual rate of 2.5 percent during the first three months of the year — significantly slower than most economists had expected. The culprit? A surprising 11.5 percent annualized drop-off in military spending. The decline comes on the heels of ...

The austerity claque got it wrong. And the harsh bill is being paid by millions of Americans and millions more in Europe in jobs lost, homes foreclosed, families split apart, hopes crushed. They can't repay the costs of their folly. We don't really need an apology. But could they at least get out of the way so we could get on with the jobs programs that we should have undertaken years ago? Austerity has been tried and found wanting in practice. Instead of expansion and growth, Europe has been...

The benchmark Dow Jones industrial average reached an all-time high Tuesday, underscoring the contrast between corporate America's rapid recovery since the financial crisis and the rest of the country's ongoing struggle to regain its footing. More than four years later, the crisis seems a distant memory for a number of big U.S. companies that are reporting record profits, even though many Americans remain jobless, wages have stagnated and Washington remains paralyzed in the face...

BERLIN — Treasury Secretary Jack Lew and German Finance Minister Wolfgang Schaeuble on Tuesday played down differences in their views on whether to focus more on growth or austerity in lifting Europe's economy, but deep divides between the two remained. On the second day of his trip to Europe, Lew met with Schaeuble, the architect of Germany's response to the financial crisis buffeting the continent, and argued that more must be done to encourage economic growth. Germany has acknowledged the need to do more to...

BRUSSELS — Treasury Secretary Jack Lew , quickly embracing his role as the leading U.S. diplomat on the economy, pushed his counterparts in Europe on Monday to do more to drive economic growth and enact stronger and more unified defenses against financial panics. Lew was making his first official trip to Europe as President Obama's second Treasury secretary after serving as his budget director and chief of staff. In the first two months of his tenure, Lew's role...