more of your boy, billy's legacy for GW to clean up.
Monday January 8, 11:06 am Eastern Time
US recession seen in first half 2001-Morgan Stanley
NEW YORK, Jan 8 (Reuters) - The U.S. economy will probably sink into recession in the
first half of 2001, breaking its longest expansion in history, Morgan Stanley Dean Witter's
chief economist forecast on Monday.
Stephen Roach said U.S. gross domestic product, the main measure of the economy's health,
would likely contract by 1.25 percent over the first half of 2001. His firm now expects 1.1
percent U.S. GDP growth for the entire year, sharply reduced from a previous forecast of
2.5 percent annual growth.
``The cumulative forces of contraction are both accelerating and deepening in the U.S.,'' Roach told Reuters in a telephone
interview.
Roach cited slipping consumer confidence, rising jobless claims, protracted weakness in the manufacturing sector as well as a
recent slide in equity prices as likely to cause the first contraction in the world's largest economy in more than a decade.
``All of that together to me is a classic sign of the U.S. economy that has now moved into recession,'' Roach said.
A recession is generally defined as two successive quarters of economic contraction. The government's latest reading on GDP
growth in the fourth quarter of 2000 showed the economy growing at a 2.2 percent annualized pace.
Investment bank Goldman Sachs said on Friday it expected GDP to shrink by 0.3 percent in the first three months of 2001. |
