The economy is still only bumping along. In 2010 official GDP growth figures showed that the economy was barely recovering after the steep (3.1%) contraction in 2009. In 2010 GDP growth was just 1.6%.
Growth for the first half of 2011 was an apparently impressive 3.6%, year-on-year, but this figure was flattered by double digit growth in construction (up 20%) and mining and quarrying (up 15%).
Manufacturing was up by a much more modest 2.1% and demand for utilities such as gas, water and electricity fell by 1.0% in the first half of 2011, compared with the same period of 2010. So the overall growth figure hides a misfiring economy.
What makes the first half growth figure worse is that interest rates have been lower than annual inflation. In the year to August 2011, consumer prices have risen by 6.82%, but lending rates were 5.75%.
To be fair, there has been only one bad month of inflation in 2011, in April, when the index jumped 3%. Otherwise monthly inflation has been between 0.7% and 0.1% a month.
The sluggishness of the US economy is also holding back remittances. So far this year they are up by 4.8%, compared with the same period of 2010, at US$2.422bn. More comfortingly, the inflow of remittances in June was up 7% on the same month in 2010.
