What the heck is this impending US Economic slowdown?

IMF issued a warning last week about impending US Economic slowdown. The growth target for US economy has been revised downwards from 3.3% to 2.9%. The main reason attributed to the slowdown is the burst in housing market. The US department of commerce reported decline in the sale of new homes by 4.3% and inventory of unsold homes climbed record high. The Federal Reserve wants to cool off the growth to overcome this burst. I leave it my friends who specialize in economics to explain us the technicalities of the slow down. (Tag to Vatsan, Santhakumar or any other who want to write on this)

 

Few worthy happenings and announcements that came after this:

 

1. Few stocks took the beatings. Shares of Tomkins, Rinker group and Lenova are falling. Around the Markets: U.S. sneezes and world catches cold - Marketplace by Bloomberg - International H
2. IMF warned the Asian countries not to over-dependent on US exports and advised to concentrate on improving domestic business. US economic slowdown is key risk for Asian growth, warns IMF
3. Federal Reserve faces the twin problem of rising inflation and slow economy. This is interesting because the interest rate is right now at 5.25% and this rate had been revised upwardly 17 times before. IMF warns of U.S. economic slowdown - baltimoresun.com
4. The economic growth in other parts of world will compensate for this US slowdown. China economy is showing a steady growth.

 

Few funny ways to know that effect of US economy slowdown in your job are:

 

1. When your boss says your quarterly performance bonus is declared as 5%
2. When your boss says your annual salary hike is decided, but kept frozen for few months. You will get it as pre-dated hike after next January
3. When HR manager says the recruitment drive is frozen for next 3 months
4. When your colleague says “I love this company, I am going to work for the profits for this company”
   

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