The U.S. economy grew more rapidly in the fourth quarter than previously estimated as consumer spending climbed by the most in three years, showing the expansion had momentum heading into this year’s harsh winter.
In her first meeting as Federal Reserve chair next week, Janet Yellen will put her stamp on policy by reaching for a favorite tool of central bankers: words intended to guide markets in the direction policy makers want.
Federal Reserve officials agree that they must retool their guidance on when to consider raising interest rates. Chair Janet Yellen’s task is to forge a consensus on the new message from their disparate views.
The U.S. has been in a jobs emergency since at least 2008. The cause of the crisis -- too little demand -- isn’t mysterious, and neither are the solutions. We could invest in infrastructure to create construction jobs. We could give tax breaks to employers who hire new workers. We could restore the payroll tax cut to workers so they have more money to spend. We could help state and local governments hire back some of the employees they laid off during the recession. Macroeconomic Advisers, an economic consulting firm, found that the American Jobs Act, which contained many of these policies, would have created 2 million jobs.
A shutdown of the U.S. government would reduce fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists say, as government workers from park rangers to telephone receptionists are furloughed.