FORTUNE – When Wall Street learned Friday that the U.S. economy grew slower than expected during the start of the year, it renewed talk that we may be in for another "spring slump," if not a "spring swoon."
Whatever you call it, a slowdown in the economy has emerged every spring for the past three years. Growth starts the year off strong, but then just as investors and traders think it's gaining steam, growth suddenly detours into a serious slowdown. By summer, analysts really start worrying, only to -- psych! -- see better growth by fall.
Since March, signs of a spring slowdown have emerged -- the latest was Friday's report from the Commerce Department, which showed that GDP grew at a 2.5% annual rate between January and March. While lower than the widely expected 3.2% growth, it's still markedly stronger than the previous quarter's 0.4% growth.
And last month, another sign: Hiring slowed sharply, with the economy adding only 88,000 jobs, the lowest monthly gain since last June.
While Wall Street might wonder if we're in for another slump this year, the slowdown may actually be a total myth. It may have more to do with issues with the way economic data is calculated than what's really going on in the economy, says Gary Evans, global head of equity strategy at HSBC.
After the U.S. economy collapsed during the final quarter of 2008, the huge drop in growth was interpreted as a seasonal adjustment. And so from then on, data for the first quarter in subsequent years was automatically adjusted higher. While this might have smoothed out the numbers from dramatic lows, it may have also made GDP growth during the second quarter appear weaker than what it really was. What's more, GDP growth during the spring might look lower because the Federal Reserve announced major plans to stimulate the economy at the end of the summers in 2010 and 2012.
To be sure, this doesn't change some real headwinds we face this year -- namely, higher taxes and federal spending cuts, known as the sequester, that kicked in in March as part of a move to reduce the U.S. deficit. While consumers appear unfazed, at least for now, the cuts could weigh heavier later this year when government agencies furlough employees and reduce contracts. Whatever the reason for a spring slowdown, HSBC forecasts growth will slow sharply during the second quarter to 0.9% and 1.1% during the third quarter.
If a slump does indeed materialize, the economy is at least somewhat better off to handle one than it did three years ago.
China's growth may shift more than it will decline. In the years ahead, less developed parts of the country could pick up where development in bigger cities cool off.
FORTUNE – As China's economy slows, many have wondered if record growth in the world's second-largest economy has approached the beginning of the end. During the latest quarter, China's gross domestic product rose 7.4%, still a healthy clip but also the seventh MORENin-Hai Tseng, Writer - Oct 23, 2012 10:50 AM ET
As bad as the Greek financial crisis seems, the land of Pericles is only the second-most-indebted nation in the world. The government of Japan holds top honors: Its debt equals 234% of its GDP. The reason Japan hasn't been in financial-crisis mode is that it owes most of that money to itself. By contrast, the U.S., seventh on our list, owes $4.4 trillion to foreigners. To China alone Uncle Sam MOREAug 9, 2011 5:00 AM ET
Most of the spending cuts won't kick in until 2013, but it's not clear the U.S. economy will be ready to handle the blow even then.
FORTUNE -- Markets today initially cheered the rough sketches of a highly anticipated deal to raise the U.S. government's debt limit, but how the nation's fragile economic recovery responds will depend on the final details of the plan and how it eventually rolls out.
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In normal times, the default setting for the U.S. economy is 'expand.' But these aren't normal times.
By John Cassidy, contributor
FORTUNE -- Last year I dropped by a birthday party for Nouriel Roubini (a.k.a. "Dr. Doom"), the New York University economist who shot to fame after predicting, in 2006, a housing and credit bust. Somebody brought out a cake. On top of it was a big frosted "W," representing the double-dip MOREJun 8, 2011 5:00 AM ET
The good news out of Friday's jobs report is that everyone's favorite economic villain, commodity prices, may be about to change sides.
The weak jobs report Friday adds to the sense that U.S. growth is slowing. That's yet another setback for the 13.9 million people out of work, and an unhappy thought for anyone gunning for better wages or more hours this year.
You can blame the past year's surge in prices for MOREColin Barr - Jun 3, 2011 11:26 AM ET
The economist and housing expert discusses his creative solution to the U.S. debt crisis, why the suburbs are dying, and why we shouldn't be afraid of financial crises.
FORTUNE – Yale University economist Robert Shiller is perhaps best known for the closely watched S&P Case-Shiller Home Price Index, which offers a month-by-month play on the health of the U.S. housing market. He is an oft-quoted authority on the problems of America's MORENin-Hai Tseng, Writer - May 23, 2011 11:00 AM ET
We've returned to pre-recession levels in our exports, but every other sector of the economy still has a ways to go.
FORTUNE – After more than a two-year slump, the U.S. is finally exporting as much as it did before one of history's longest economic recessions. Between June 2008 and April 2009, U.S. goods and services sold to the world fell by 23%, or $39 billion. Since then, exports have risen MORENin-Hai Tseng, Writer - May 19, 2011 11:35 AM ET
The economy has been bedridden far longer than we realize -- and you can blame lying statistics for at least some of it.
So says Rob Arnott of Research Affiliates, a Newport Beach, Calif., investment management firm with some $50 billion under management. He argues in his monthly newsletter that, contrary to popular belief, the roots of our current malaise predate the financial crisis – and not by a little bit.
Arnott MOREColin Barr - Apr 20, 2011 6:22 AM ET
Well, so much for the U.S. economy getting off to a fast start for 2011.
Economists at Bank of America cut their first-quarter growth forecast to 1.5% Monday, saying rising commodity prices and flat wages are overwhelming the latest stimulus plan and squeezing consumer spending. BofA joins Goldman Sachs in saying the economy is softening in spite of the well publicized March job gains.
The downgrade is only the latest by BofA, MOREColin Barr - Apr 4, 2011 10:40 AM ET
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