GDP growth estimate: 2.4% in the last quarter!!!
To illustrate why this is such a dismal figure, here is the estimable economist Dean Baker:
“In the first four quarters of recovery following the 1974-75 recession the economy grew 3.1 percent, 6.9 percent, 5.3 percent and 9.4 percent. In the first five quarters following the 1981-82 recession the economy grew by 5.3 percent, 9.3 percent, 8.1 percent, 8.5 percent, and 8.0 percent.”
There’s not enough growth to maintain employment levels in relation to population growth.
Despite all the hand wringing about small business, the fact is that there’s little or no consumer demand (70% of the US economy) because those consumers who still have jobs are cutting back on expenditures.
The private sector meanwhile is sitting on piles of cash. Currently, the Fed’s holding over $1 trillion in bank deposits.
Given that the stimulus effects are largely behind us, it would appear that the second half of 2010 may see the US economy sliding backward into another recession.
The response from Washington and the Fed: as usual, nothing!
Gorilla says: “Tokyo, here we come!”