The full text of this testimony is available here as an Adobe Acrobat PDF.

At present, the aggregate growth of the U.S. economy is at a near standstill. Growth in the fourth quarter of 2007 was a paltry 0.6 percent (all GDP growth figures are annualized rate) and indicators for the first quarter of 2008 suggest that growth remained very slow and was possibly negative. An excessive supply of residential housing, inflated home prices, and turmoil in the credit markets are at the center of the current economic weakness. Other sectors and industries could become ensnarled as well. The outlook for the economy for the remainder of 2008 is highly uncertain. Many economists expect an improvement in the second half of the year, though such a timely return back toward trend growth depends on a prompt recovery of credit markets and financial institutions.

While the performance of the aggregate U.S. economy is a useful thumbnail for gauging the simple trends of the economy, our economy is an amalgamation of numerous sectors, industries and distinct labor markets. Looking more closely at specific sectors and geographic areas reveals considerable variation in our economic performance. Our economy is clearly faltering in some areas while growth remains relatively robust in other areas.

Alex Brill is a research fellow at AEI.

The full text of this testimony is available here as an Adobe Acrobat PDF.