Thursday, March 19, 2009

The U.S. economic outlook

The Times of London gives its U.S. economic outlook:
The future of the US economy hinges on whether the $2 trillion of fiscal stimulus packages work. If so, this is the path we expect the US to take:

The last quarter, in which the US economy shrank by 6.2 per cent, will have been the bottom of the recession. In the current quarter the US economy will shrink by 5.8 per cent and by the end of December the US should be out of the recession.

Unemployment, however, which stands at 8.1 per cent, is expected to continue to rise until the end of 2010 at least, while the housing slump isn’t even at the halfway stage yet. House prices, on average, have lost about a quarter of their value.
By "bottom of the recession," I think they mean the period of deepest contraction. They obviously expect the U.S. economy to continue contracting at least through the current quarter, and perhaps beyond. They also obviously expect a jobless recovery, as happened after the past two U.S. recessions.

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