04-29-2017  10:42 am      •     
The Wake of Vanport
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NEWS BRIEFS

Clark College Hosts Over 100 Employers at Job Fair

Annual Career Days workshops and job fair provides students and community members with skills and connections to find jobs ...

Oscar Arana Chosen to Lead NAYA’s Community Development

Oscar Arana to serve as NAYA’s next Director of Community Development ...

High School Students Launch Police Forum, May 16

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POWGirls Announces Two Workshops for Summer 2017

Workshops open to girls ages 15-19 ...

U.S. & WORLD NEWS

OPINION

Take Care of Yourself, Your Health and Your Community

Sirius Bonner, Director of Equity and Inclusion for Planned Parenthood Columbia Willamette, writes about the importance of...

Sponsors of Hate Today Must Be Held Accountable

The Foundation for the Carolinas has spent tens of millions of dollars over the years supporting groups that sponsor hate ...

John E. Warren on the Woes of Wells Fargo

Wells Fargo's rating downgraded from "Outstanding" to "Needs to Improve" ...

CBC Opposes Nomination of Judge Gorsuch and the Senate Should Too

Americans need a Supreme Court justice who will judge cases on the merits, not based on his or her personal philosophies ...

AFRICAN AMERICANS IN THE NEWS

ENTERTAINMENT

WASHINGTON (AP) — Deeper spending cuts by state and local governments weighed down U.S. economic growth in the final three months of last year.

The government's new estimate for the October-December quarter illustrates how growing state budget crises could hold back the economic recovery.

The Commerce Department reported Friday that economic growth increased at an annual rate of 2.8 percent in the final quarter of last year. That was down from the initial estimate of 3.2 percent.

The weaker figure was disappointing and prompted some economists to lower their forecasts for economic growth in the current January-March quarter.

State and local governments, wrestling with budget shortfalls, cut spending at a 2.4 percent pace. That was much deeper than the 0.9 percent annualized cut first estimated and was the most since the start of 2010.

Consumers spent a little less than first thought. Their spending rose at a rate of 4.1 percent, slightly smaller than the initial estimate of 4.4 percent. Still, it was the best showing since 2006. And it suggests Americans will play a larger role this year in helping the economy grow, especially with more money from a Social Security tax cut.

One of the crucial questions is whether consumers can spend enough this year to help offset negative forces in the economy — notably struggling state and local governments and a wobbly housing market that has depressed homes values.

Rising energy prices also pose a danger. If oil prices were to rise to $150 or more a barrel and then stay there for months, another recession is possible, economists said. Gasoline prices would near $5 a gallon. Consumers and businesses would spend much less, and some employers might slash jobs.

"Consumers stumbled a bit to start the year, and while we expect them to pick up the pace some in coming months, the recent rise in energy prices poses a notable headwind," said economist Michael Feroli at JP Morgan Chase Bank.

Overall economic growth in the October-December quarter was marginally better than the 2.6 percent pace logged in the prior quarter. The economy has steadily grown after hitting a difficult patch last spring. But rising oil prices and budget cuts by state and local government are creating headwinds.

Feroli and other analysts now predict the economy will grow at a pace around 3.5 percent in the January-March quarter. That's down from earlier estimates in the 4 percent-plus range.

Government stimulus is fading and budget cuts at the federal level could further hamper economic growth.

The federal government trimmed spending at the end of the year, entirely reflecting cuts to defense spending. And a showdown over the U.S. budget is taking place on Capitol Hill between Democrats and Republicans, threatening a government shutdown.

For all of last year, the economy grew 2.8 percent, the most in five years, according to revised figures. That was down a bit from the 2.9 percent growth first estimated a month ago. However, it was an improvement from 2009 when the economy suffered its worst decline in more than 60 years.

Still, economic growth must be stronger to make a noticeable dent in unemployment, which was 9 percent last month. The economy would need to grow 5 percent for a whole year to significantly bring down the unemployment rate. Economic growth of just 3 percent a year would hold the unemployment steady and keep up with population growth.

Looking ahead the economy is expected to grow by 3.2 percent this year, according to an AP Economy Survey.

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