Recession? A Different View

July 31st, 2008 at 04:38pm Bob Trojan

This is from The Economist, a UK weekly publication which I enjoy reading because it gives their views on the U.S. from a perspective other than our U.S. media. Interesting headlines and excerpt….read the rest of the story. Don’t forget, exports are a valuable source of good paying jobs!

“America’s economy has steered clear of recession so far. How long can it keep growing?THE American economy has often defied predictions of its demise. It has done so again. Official figures published on Thursday July 31st show that America’s GDP rose at an annualised rate of 1.9% in the second quarter. This would a respectable enough growth rate at the best of times. That this was achieved despite the considerable handicaps of a badly damaged banking system, a big jump in oil prices and the ongoing housing bust, makes it remarkable.

Revisions to earlier quarters took some of the shine of the news. Government statisticians now reckon that the economy shrank in the final three months of last year: the annualised change to GDP was revised from 0.6% to -0.2%. But growth picked up slightly to 0.9% in the first quarter, so on this reading at least, America seems to have just steered clear of a technical recession—two consecutive quarters of contraction.

One reason why the economy has held up well is that the weak dollar has encouraged exports and curbed imports. American firms have been kept going by foreign sales during a period in which domestic spending has been somewhat hampered. In the two years since the housing bust started in earnest, the contraction in homebuilding has taken around one percentage point a year of GDP growth. That drag has been more or less fully offset by the boost from net trade. In the second quarter, exports net of imports accounted for all and more of the increase in GDP”……..continue at this link.

http://www.economist.com/finance/displayStory.cfm?story_id=11850301&source=features_box1

Entry Filed under: Economy