US economy continues to slowdown
The BEA announced that economic growth in the second quarter was 1.7% and only 1.1% in the first (revised down from 1.8%). Note the significant contraction of the government numbers, according to the Report:
Real federal government consumption expenditures and gross investment decreased 1.5 percent in the second quarter, compared with a decrease of 8.4 percent in the first. National defense decreased 0.5 percent, compared with a decrease of 11.2 percent. Nondefense decreased 3.2 percent, compared with a decrease of 3.6 percent. Real state and local government consumption expenditures and gross investment increased 0.3 percent, in contrast to a decrease of 1.3 percent.Yes austerity does work, and it produces slower growth, and it will by Okun's Law produce higher unemployment rates. This are well established empirical regularities.