Rich Miller
Monday, Jan 5, 2008

The engines that have lifted the U.S. economy out of every recession since World War II will be of little help this time around.

Inventory rebuilding, household spending, home construction and payroll growth — the forces that powered, to a greater or lesser extent, each recovery since 1945 — may remain missing for much of 2009. A glut of unsold properties may keep housing depressed, while shriveled savings will discourage consumers. Companies may be reluctant to restock and rehire while their profits are squeezed.

“There are no obvious drivers of growth from the private sector,” says Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York.

The result: A recovery, whenever it comes, may be anemic and heavily dependent on low-cost lending by Federal Reserve Chairman Ben S. Bernanke and stepped-up spending by new President Barack Obama. Short-term interest rates might have to remain around zero throughout the year, while the federal budget deficit stays at or near record highs into 2010.


“If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment,” Obama said in his weekly radio address on Jan. 3. The jobless rate stood at 6.7 percent in November.

UBS Securities LLC forecasts that gross domestic product will contract at a 3 percent annual pace this quarter after shrinking 4.5 percent in the final three months of 2008.

Full article here

Research related articles:

  1. U.S. Economy: Growth Faster Than Initially Estimated on Exports
  2. UK economy heads for ‘horror movie’
  3. Obama May Not Wait for Inauguration to Put His Stamp on Economy
  4. Bank of England warns more needed to rescue UK economy as bail-out falters
  5. U.S. Economy: Jobless Rate Rises to Four-Year High
  6. Honeybee Wipeout May be Averted with Flower Recovery Zones
  7. GM Not Seeing Signs of U.S. Recovery, Wagoner Says
  8. Fed May Cut Rate to 1%, Signal Steps to Save Economy
  9. Financial crisis: George W Bush to meet John McCain and Barack Obama on economy
  10. Obama Sets Expansive Goal for Jobs
  11. Spending the Economy into Oblivion
  12. More doom for global economy

Take advantage of one of nature’s most hardworking nutrients with Vasobeet now at 60% off!

Related Articles