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Why do we need GDP to grow anyway?
U.S. GDP grew at an annual pace of 2.5 percent in the first quarter, falling short of the 2.8 percent that economists predicted and disappointing investors. But in uncertain economic times, why aren't economists satisfied if GDP simply holds steady?
"GDP growth is linked to jobs growth," says David Weil, a professor of economics at Brown University. "So unless the economy is growing rapidly enough, it's not going to be able to absorb the new workers who are coming in, much less reduce unemployment."
Each year, as a new -- and bigger -- crop of young people enters the job market, they are counting on GDP growth to make room for them in the job market. But it isn't just about jobs. Economists say that GDP growth affects how we view ourselves as a nation.
"Most people agree, I think, that output, and hence, their ability to consume should improve. This is sort of the American Dream -- things get better as you look toward the future," says Richard DeKaser, an economist with Wells Fargo.
Audio Extra: Marketplace Economics Correspondent Chris Farrell discusses GDP growth, consumer confidence and the financial industry -- and it doesn't look good.
Audio Extra: Chris Low, chief economist with FTN Financial, explains whether 2.5% GDP growth is the new normal.
Staying smart and safe in a world full of scams
We're talking scams on Marketplace Money this weekend. Take your pick: Ponzi schemes, real-estate rackets, even having your stuff held hostage by movers.
I'm frequently asked how you can protect yourself from being fleeced by scammers. Tough question -- there's no one-size-fits-all answer. But there are a few general things everyone should keep in mind.
First, it may sound trite but the old adage applies: If it sounds too good to be true, it probably is. We'd all like to think we're the one person who's been offered a totally sweet deal. But chances are, the sweeter the deal, the more likely it's bogus. If you have any doubts, walk away first and ask questions later.
Remember, no one can protect you better than yourself, so do your homework. Take a close look at all credit card and phone bills. Sneaky charges can easily creep onto both. If you don't recognize a particular charge or fee, don't hesitate to call your bank or phone company.
And in this age of identity theft, you have to be your own I.D. cop. I don't think it pays to sign up for a credit-monitoring service unless you're already a fraud victim. Instead, you can get free copies of your credit reports at AnnualCreditReport.com. And if you space out each credit agency's report by four months, you can get a full year's worth of credit monitoring without paying a thing.
Also, check with your local AAA. Some state branches of the organization offer free credit monitoring to members.
The bottom line is that there's no shortage of con artists trying to separate you from your money. With a little effort, you keep them at bay.
Pretty much.
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Economy Picked Up In First Quarter: Grew At 2.5 Percent Pace
Growth was a bit weaker than economists expected, but was well above fourth-quarter 2012's weak 0.4 percent increase. The first-quarter figure is likely to be revised in coming months, perhaps closer to the 3.2 percent growth economists were expecting.




