Tuesday, August 3, 2010

Economists predict double dip recession
Leading indicators point toward an extended downturn

WASHINGTON, DC—The Associated Press is reporting economic forecasts for 2011, and they are bleak; citing a continuing high unemployment rate, weak GDP growth, lack of consumer spending, and a anemic housing market:

“The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend and employers hesitant to hire, according to an Associated Press survey of leading economists.”

Growth predictions are estimated to be 3 percent or less in the first and second quarters of 2011, with the country needing 5+ percent growth—led by consumer spending—over at least two quarters in GDP to lift out of the extended recession. But according to the AP, that spending will be absent:

Consumers aren't leading this rebound, as they usually do, despite ultra-low borrowing costs. Their spending growth will weaken in the second half of this year and strengthen only slightly next year, a majority of economists said.” 

That lack of consumerism is a drag on consumer confidence and on retailers and small businesses, which make up 70 percent of the economy.

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