Archives: 29 April 2011

Vast Majority of Americans Declare: We’re in a Recession

by TwoCentsEditor
Published on: 04/29/2011
Categories: 'Best of Web', Current Events, Economics, Financial Markets
Tags: , , , ,
Comments: No Comments

Editor’s Note: Could be that the proletariat is finally waking up to the idea that the economic figures lie and the the political liars use figures. When a million people apply for 60,000 McDonalds jobs, does that sound like a healthy economy to you?

(Reuters) – More than half of Americans say the U.S. economy is in a recession or a depression despite official data that show a moderate recovery, according to a poll released on Thursday.

The April 20-23 Gallup survey of 1,013 U.S. adults found that only 27 percent said the economy is growing. Twenty-nine percent said the economy is in a depression and 26 percent said it is in a recession, with another 16 percent saying it is “slowing down,” Gallup said.

The poll findings have a 4 percentage point margin of error, according to Gallup.

The health of the U.S. economy is expected to be a major issue as President Barack Obama, a Democrat, seeks re-election in 2012.

The government reported on Thursday that U.S. economic growth slowed more than expected to 1.8 percent in the first quarter of the year, as soaring food and gasoline prices drained consumer spending power.

A slowdown in first-quarter growth was acknowledged on Wednesday by the Federal Reserve, which described the U.S. economic recovery as proceeding at a “moderate pace.” That was a step back from the “firmer footing” that Fed officials cited for the recovery in March.

The Gallup poll found that Democrats are the most likely to say the economy is growing. Forty-three percent of Democrats said the economy is in a recession or depression, 13 percent said it is slowing down and 42 percent said it is growing.

Sixty-eight percent of Republicans and supporters of the conservative Tea Party movement said the economy is in a recession or a depression. Fourteen percent of Republicans and 13 percent of Tea Party supporters said the economy is growing.

Fifty-seven percent of independent voters — a crucial segment of the electorate for Obama’s re-election bid — said the economy is in a recession or depression and 24 percent said it is growing.

Doubts Increase on US Recovery after weak GDP Data

by TwoCentsEditor
Published on: 04/29/2011
Categories: Current Events, Economics, Financial Markets
Tags: , , , ,
Comments: No Comments

Doubts have been cast over the strength of the US economic recovery after output grew at an annualised rate of only 1.8 per cent in the first quarter.

A surge in oil prices held back consumption growth, while public spending fell at every tier of the US government.

Most analysts expect the weakness to be temporary but government support for the economy will start to fade later in the year, so the lack of any acceleration in growth points to years of further pain for the world’s largest economy.

At this stage of a recovery, growth often rebounds by between 4 and 5 per cent. Expansion of less than 2 per cent will not create enough jobs to keep up with population growth and cut the US unemployment rate of 8.8 per cent.

The dollar fell further on release of the growth numbers as investors judged that weak growth would cause US interest rates to stay lower for longer.

Although overshadowed by the growth figures, there was another disturbing economic release on Thursday. Initial claims for unemployment insurance rose to 429,000 and the four-week average rose back to more than 400,000. Jobless claims had been on an improving trend and the reversal suggests that momentum in the labour market might have stalled.

Economists attributed some of the growth weakness to a temporary decline in defence spending and weather-related weakness in construction output.

Sales by consumer goods companies, led by Procter & Gamble, the world’s largest, provided fresh evidence of consumer weakness and, in some product categories, suggested consumers felt more cash-strapped than last year.

Growth was also held back by high petrol prices, which kept growth in real personal consumption spending to an annualised 2.7 per cent, compared with 4 per cent in the fourth quarter of 2010.

Prices increased by 3.8 per cent but, even excluding food and energy costs, they rose at a rate of 1.5 per cent, the fastest since 2008.

Nariman Behravesh of IHS Global Insight said: “While higher gasoline prices are eroding consumer confidence, an improving jobs market is supporting consumer spending. Meanwhile, businesses remain optimistic and are spending more freely on both new technologies and new hires.”

The Federal Reserve on Wednesday revised its outlook for the rest of the year. Officials now expect the US economy to grow at a rate of between 3.1 and 3.3 per cent in 2011, compared with an earlier forecast of 3.4 to 3.9 per cent.

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