The International Monetary Fund cut its worldwide growth forecast today and Goldman Sachs, in the wake of weak retail sales, cut its annualized U.S. GDP growth to a mere 1.1 percent. Bottom line: With fiscal policy paralyzed and the Federal Reserve apparently at the end of its rope, with the European crisis continuing slo-mo, 2012 will see little progress in digging out of the Great Recession.
So why is it that Seattle seems so prosperous, despite all this? A diverse, dynamic economy makes us an outlier, especially with expansion at Amazon.com and Boeing enjoying a big backlog of orders. The housing market is not only due to hit bottom this year but is bouncing back in some parts of the Puget Sound, although it won’t return to booming construction. But the reality is, we can’t avoid the pain forever. The Great Recession arrived here later than most places and this new slowdown is headed our way.
The Seattle Times’ Drew DeSilver detailed how the eurozone crisis is holding back Washington companies. That will only worsen as the rolling recessions claim more eurozone nations.
Much will depend on how much China and the rest of Asia slows, and especially on avoiding another banking crisis. But the road to the end of the year looks increasingly slow and bumpy, even for fortunate outliers.
And Don’t Miss: America’s workers need new skills to stay ahead || Slate
Today’s Econ Haiku:
For Microsoft, NBC
Comments | More in