Disappointing data darken economic outlook - Aug 2010
Investors, businesses, consumers hunker down amid signs of slower growth
The outlook for the U.S. economy just went from half-full to half-empty.
The latest economic data out this week confirmed a gloomier forecast issued by the Federal Reserve Tuesday after its regular rate-setting meeting. That has renewed fears of a so-called ?double-dip? recession that are weighing on investors, spooking consumers and slowing businesses from hiring. Many economists argue that a recovery, slow but steady, is still intact. But growth forecasts are falling, and the odds of another contraction are rising.
After a surge in growth late last year and in early 2010, the government estimated last month that gross domestic product grew at a 2.4 percent in the second quarter, down from 3.7 percent in the first three months of the year. But fresher data suggest the economy may have barely grown at all in the quarter, and early results from the current third quarter are not too encouraging. As a result a midsummer stock market rally was abruptly halted this week and the stock market reversed course, dropping about 4 percent in just a few sessions. One troubling indicator came Wednesday, when the Commerce Department reported that the U.S. trade deficit widened in June, as imports surged and exports fell. Economists at Barclays? Capital told clients the report suggested that GDP growth for the second quarter might be revised to as low as 0.3 percent.
Meanwhile the painfully weak job market shows no signs of improvement. The economy has added a paltry 650,000 jobs this year and the official unemployment rate remains at a recessionary 9.5 percent. A report Thursday showed that first-time claims for jobless benefits rose in the latest week to 484,000, the highest total since February. The lack of job growth has put a damper on consumer spending, which still accounts for about 70 percent of GDP and typically drives economic recoveries.
On Friday, the government reported that retail sales edge up in July but mainly due to a rise in gasoline prices. A separate survey on consumer sentiment showed that few of them expect to see the economy improve in the months head. Though consumers continue to pare down debt, they?re still struggling to pay off the huge borrowing spree of the past decade. "We've already taken a trillion dollars of household debt out of the system, either written down, walked away from, or modified," said David Rosenberg, chief economist at the investment firm Guskin Scheff.
?But there's another $6 trillion to go."
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I think these people are either fucked in the head, oblivious to reality, or intentionally trying to lead the sheep into thinking everything is fine so they'll spend the last $5 bucks they have on something useless. No "recovery" was ever seen on the streets where it fucking matters. "Double-Dip"? LOL.... we're still in the massive first dip. We never clawed our way out of it.
Further evidence that Wall Street is entirely disconnected from reality.