US Recession Threatens Due To Household Spending Decline
This
is a very good summary
article from Bloomberg on the US growth slowdown. Here is the opening:
Aug. 11 (Bloomberg) -- Recession signals in the world's largest economy are flashing red again.
Growth in the second quarter slowed to a pace that has typically been followed by a contraction within a year.
Household spending fell in June for the third straight month; never in the past five decades has this happened outside of a slump. The Standard & Poor's 500 Index plunged 16.8 percent in 11 days, performance that's occurred only twice since at least 1970 without indicating a downturn.
"With so many red flags, the chances of a recession are rising," said Jonathan Basile, a senior economist at Credit Suisse in New York. "A lot of the economic indicators are teetering. We've gone very quickly from a slowdown scare to a recession scare."
Signs that the flagging U.S. recovery may fizzle haven't been lost on Federal Reserve Chairman Ben S. Bernanke and his colleagues, who pledged this week to hold interest rates at a record low through at least mid-2013. Officials said they "discussed the range of policy tools" to strengthen growth and are "prepared to employ these tools as appropriate."
"Downside risks to the economic outlook have increased," according to the Federal Open Market Committee statement after the Aug. 9 meeting. Consumer spending has "flattened out," the labor market has deteriorated and the expansion is "considerably slower" than expected.
David Fuller's view I do not feel that analysts' estimates for corporate profits during 2H 2011 fully reflect the slowdown in US and also global GDP growth.
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