US economic growth slowed to an annual pace of 2.9 per cent in the second quarter as housing starts fell more than initially believed, the government said Wednesday.
“Things do seem to be getting worse very quickly. Free-fall is a strong word, but I think it’s the right one to use here,” says Paul Ashworth, chief US economist at Capital Economics.
But most Americans look into the future, see a weakening property market, and fear not. They have been told that soft housing prices pose no problems for the rest of the economy. They have no reason to doubt that it is true; no reason to squint and try to see further. They dread neither slump nor boom, neither war nor peace. Everything will be managed by the authorities so as to do no great damage to the homeland, they believe.
But you typically don’t lose money or make it when things happen as expected. No one plans on losing his life savings. It comes as a surprise – along with sudden death, financial crashes, and other crises.