The U.S. economy grew at a sluggish 2.5 percent annual rate between April and June, causing economists to fear that growth may slow in the coming months.
The Washington Post reported that the Commerce Department was not surprised by the weak growth, but some industries did not perform as well as they had previously expected.
Businesses racked in fewer profits and exports grew at a slower rate than economists had predicted. The one area that expanded more than researches expected was government spending at the state and local levels.
Economists believe that the economy is growing at an even slower rate in the current quarter, perhaps at or below two percent.
Researchers attribute the stagnant economic activity, in part, to consumers’ hesitance to open up their wallets. Consumer spending drives roughly 70 percent of the US economy.
Retailers are noticing that goods are failing to leave their shelves and are responding accordingly. Recently, Target announced that it plans to curtail holiday hiring practices because of disappointing trends in customer traffic. Instead of adding on an additional 88,000 seasonal employees, as it has in the years before, Target only plans to employ an extra 70,000 workers this holiday season.
The nationwide retail store says that it will meet holiday demands by giving year round employees additional hours instead.
Target is not alone in its reluctance to add new employees amidst an uncertain and weak economy. Employers have added an average of just 155,000 jobs since April, compared to the 205,000 jobs they added in the first four months of the year.
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