US recession "entering final hours" after 2nd quarter shock recovery

darkman2

The US is on the verge of returning to growth

Obama sees US economy improving

US President Barack Obama has said that new figures on the American economy indicate progress is being made in tackling the country's problems.

The economy shrank at an annual pace of 1% in the April-to-June quarter, government figures have shown.

The data was better than expected, but marked the longest period of decline since records began in 1947.

Analysts said the data suggested the worst could be over for the economy - now in recession for a year.

Mr Obama said the figures showed that the economy was "heading in the right direction".

However, the figures for the January-to-March quarter were revised down to -6.4%. The previous estimate was -5.5%.

The revision "revealed that the recession we faced when I took office was even deeper than anyone thought at the time", said Mr Obama.

But "in the last few months, the economy has done measurably better than we had thought, better than expected", he added.

He did, however, say that there would be no recovery as long as unemployment kept rising.

The figures are worked out on an annualised basis, which reflects the change if continued at the current pace over a year.

'Worst behind us'

The figures show that the pace of contraction is slowing rapidly in the US, even more than in the UK.





The figures show that the pace of contraction is slowing rapidly in the US, even more than in the UK.

That reflects the effect of the stimulus package which has boosted government spending.

However, it still could be a number of quarters before output recovers to the level before the downturn started.

The severity of that downturn was emphasised by the downward revision of the first quarter's growth, making it one of the biggest quarterly economic drops in US history.

"We're seeing signs of stabilisation in a lot of areas of the economy, so the worst is definitely behind us," said Scott Brown, chief economist at Raymond James & Associates.

Others were even more upbeat.

"The recession is entering its final hours. Today's report shows those green shoots are starting to grow again, and the economy is finally moving down the road to recovery," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ.

The improved economic performance in the second quarter was largely due to government spending.

However, there were still falls in investment and personal consumption.

Following the figures, White House spokesperson Robert Gibbs said: "Progress is being made but much work remains."

He said unemployment figures due out next week were likely to show that hundreds of thousands more jobs had been lost.

The data prompted the Dow Jones index to jump when trading opened, but it fell back to end the day up 17 points, or 0.2%, at 9171.61.

"The figures...may well set the tone for the next few weeks on the equity markets," said David Jones, chief market strategist at IG Index.

BBC News

silverharp

no , all you are seeing is a bounce. There are too many areas that have not had a washout like commercial property, its way too early to call a bottom.

Zillah

silverharp wrote: »

no , all you are seeing is a bounce. There are too many areas that have not had a washout like commercial property, its way too early to call a bottom.

Yeah you know way better than the chief financial economist at Bank of Tokyo, internet guy.

damnyanks

Well to be fair this was predicted two years ago (That it would take until 2010 to recover)

GBP is meant to recover 2011. According to teh economists that is.

As for us, well we are screwed until 2015 by the sounds of things

silverharp

Zillah wrote: »

Yeah you know way better than the chief financial economist at Bank of Tokyo, internet guy.

well , have a look at this and see some of the people you should not be paying attention to

https://www.youtube.com/watch?v=HQ79Pt2GNJo

johnathan woss

darkman2 wrote: »

The US is on the verge of returning to growth

What are you basing this on ?

The federal government has had to borrow obscene amounts of money to bail out the banks and the automobile industry.

The number of people losing their jobs is increasing every week.
There are record numbers of people losing their houses.
Nearly all the states are staring bankruptcy in the face (look at California!).

Seriously, what are you basing your statement on ?

johnathan woss

silverharp wrote: »

well , have a look at this and see some of the people you should not be paying attention to

https://www.youtube.com/watch?v=HQ79Pt2GNJo

I noticed that all those clips bar the last are from CNBC, essentially the propaganda arm of GE.

You cannot trust a single thing you see on mainstream US television.

ei.sdraob

ok lets see

GDP = private consumption + gross investment + government spending + (exports − imports)


considering that government spending in US this month is 5% of GDP i would take any news of "growth" with a pinch of salt (only thing growing is their debt! oh does that sound familiar?)

:cool:

especially considering exports have been hit very hard everywhere in world and private consumption is down

johnathan woss

If the government paid 100,000 guys to go out digging holes every week, and another 100,000 guys to go around filling them in, GDP would go up .....

ei.sdraob

johnathan woss wrote: »

If the government paid 100,000 guys to go out digging holes every week, and another 100,000 guys to go around filling them in, GDP would go up .....

yep GDP "flourished" after Hurricane Katrina :eek: as they started rebuild things

utick

its probably even worse because a lot of the so called consumer spending is coming from stimulus money in otherwords also government money

Martyr

saw good video on trnn which might go a little way to explaining this so-called "recovery"

https://www.youtube.com/watch?v=aqrMJtWipMI

The argument is that companies have made alot of cutbacks, profits go up which makes it look like business is better ..but of course recovery is just an illusion.