U.S. Budget Impasse Holding Back Economy
WASHINGTON (AP) — The latest Associated Press Economy Survey suggests the biggest drag on the economy is the continued budget impasse in Washington, not the slow pace of consumer spending.
The consensus has emerged just as the political standoff could lead to automatic spending cuts later this week.
Twenty-three of the 37 economists who responded to the survey last week say the paralysis in Washington is a significant factor in slowing the economy. The next-biggest factors they cite, in order: too little job growth, excessive government regulation and taxes, stagnant wages and cautious bank lending. Only eight say they worry about consumers saving more and spending less.
The budget impasse that will set off $85 billion in spending cuts starting Friday will shave an estimated half-percentage point from economic growth this year.