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Companies may not be confident enough in the economic outlook to rapidly boost hiring. Some businesses may be concerned about the impact of the federal spending cuts and tax increases. An increase in Social Security taxes at the beginning of this year could slow consumer spending, which drives nearly two-thirds of economic activity. Still, consumers appear to be shrugging off the tax hikes, helped by cheaper gas and steady job gains. Consumer spending rose from January through March at the fastest rate in more than two years. And Americans boosted their spending at retailers in April, from cars and clothes to electronics and appliances. Some analysts raised their growth forecasts for the April-June quarter after the April retail sales report. Even so, most expect growth has slowed to an annual rate of around 2 percent, down from the 2.5 percent growth rate reported for the January-March quarter.
[Associated
Press;
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