British Analysts: Recession is on in the US
plenglish.com
London, Nov 13 (Prensa Latina) British analysts believe recession has started for the United States economy, according to sources cited by economic newsletter Money Morning, based in this capital.
Evidence of the above is the credit crisis, the housing market collapse, the free fall of the dollar and lower consumer confidence index that has set the trend for the North American economy.
Mainstream commentators are still reluctant to admit it, but there's a very strong chance that the US economy is set to go into reverse. The final three months of this year could well go down in history as marking the beginning of the next US recession.
Recent data shows that wholesale inventories rose 0.8% in September, far more than the 0.2% that analysts had been expecting. That could be bad news for growth this quarter. Companies will have more stock to sell, which means they won't be ordering as much from manufacturers in the coming months.
As Reuters puts it, usually an inventory build-up like this is seen as a temporary problem that the US can soon sort out. "But with consumer confidence sliding and recession fears mounting, this inventory spike raises questions about demand," says the British news agency.
The Institute for Supply Management's survey for October suggested that customer inventory levels were at their highest since January 2001, which was two months before the US's last recession begun. Meanwhile, according to research group Retail Metrics, 70% of retail chains saw weaker-than-expected October sales.
With consumption slowing, and shops ordering fewer goods, David Rosenberg at Merrill Lynch reckons that GDP for the fourth quarter could come in "perilously close to flat, or even negative."
Of course, this isn't great news for the US. But it could be very bad news for the rest of us too, says Money Morning. The worse the state of the US economy, the worse the outlook for the dollar, it recalls. |
