Channel NewsAsia

Less-than-sunny outlook for US economy despite warming weather

The US economy grew in the first quarter at its slowest rate in a year due to the cold spell in winter. As the weather improves, investors hope the recovery is back on track. Recent data however suggest a less sunny outlook. 

NEW YORK: An unusually cold winter in the United States stunted businesses and consumer spending alike.

The economy grew in the first quarter at its slowest rate in a year but as the weather improves, investors hope the recovery is back on track. Recent data however suggest a less sunny outlook.

Carleton English, co-founder and COO of Belus Capital Advisors, said: "I think we'll see upticks but I don't think we're having the overwhelming recovery we may have hoped for after four years of very bad times."

Despite the improving weather, retail sales only ticked up narrowly in April. Some analysts said it is because of a correction following two strong months for retail data.

Latest consumer sentiment figures however, showed the American people's confidence in the economy dropped in April.

According to English, this is because the public's faith in the economy will not be regained so easily, and less confidence tends to mean less shopping.

English said: "The recession left a scar rather than a bruise so consumers have not returned to the marketplace for shopping yet or consuming goods."

Worries about the strength of the economic recovery are not just affecting consumers.

Professor at New York University Joe Foudy said employers are also waiting to see just how strong the recovery is.

Foudy said: "Managers are fearful - they really got burnt in 2008. They're scared to bring on too many full-time workers, they're very hesitant. They're looking for as strong data as possible that the recovery is going to be there."

A large chunk of the US population job-hunting means fewer people with income to spend on the high street.

The economy is showing improvement but consumers are still looking for steady signs of growth. Both shop owners and investors will hope some confidence in the market returns in time for some summer spending.  

Tweet Photos, Videos and Update on this Story to  #cna