An economic recovery in jeopardy

Gross domestic product grew only 1.8 percent in the first quarter, down from 3.1 percent in last year’s final quarter.

What happened

Two years after the official end of the Great Recession, the country’s economic recovery is in danger of stalling, as a flurry of grim reports shows that growth and hiring have slowed to a crawl, housing prices continue to sink, and consumers and businesses are tightening up on spending. Gross domestic product grew only 1.8 percent in the first quarter, down from 3.1 percent in last year’s final quarter, the government announced last week. Consumer spending, meanwhile, grew at an anemic 2.2 percent in the face of a 3.8 percent monthly surge in consumer prices, led by rising costs for food and gasoline. First-time unemployment claims jumped to 424,000, and hiring probably slowed as well, as payroll processor ADP estimated that the private sector generated only 38,000 new jobs in May, instead of the expected 175,000. “This was a dismal report, indicating a significant slowdown in job creation,” said Nicholas Tenev, an economist at Barclays Capital Research.

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