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A Weaker Economy Than Anticipated - 4/21/15

A considerable volume of economic data have collectively indicated a weaker economy than anticipated.  Coming into the year, many economists had predicted that twenty fifteen would be the first year since two thousand and five that U.S. output would climb by more than three percent.  Impressive job growth was supposed to bolster wage growth.  Faster wage growth coupled with lower fuel prices were to accelerate retail spending, which in turn would help increase investment. 

But a series of headwinds conspired to keep growth in check during the early months of the current year.  Nasty weather clearly played a part, with construction workers relegated to breaking ground on seventeen percent fewer homes between January and February.  Steep snowfalls in the north and dangerous ice storms in the south also helped to keep shoppers at home, with retail sales falling short of expectations for most of this year. 

A stronger U.S. dollar has also frustrated export growth.  Falling energy prices have curtailed investment in key economic segments.  As reported in the Associated Press and according to Baker Hughes, an oilfield services company, the number of active rigs has declined 50 percent since October.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.