April 29, 2009

American depression worse than expected

POLITICS - The American economy shrank at a worse-than-expected 6.1% pace at the start of this year as sharp cutbacks by businesses and the biggest drop in United States exports in 40 years overwhelmed a rebound in consumer spending.

The United States Commerce Department's report, released today, dashed hopes that the recession's grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a five per cent annual decline, but that number has already been surpassed.

Last year the US economy shrunk 6.3%, the biggest decline in 25 years. If the American economy continues to shrink rapidly it could reach a 14% to 18% decline by the end of 2009.

Consumer spending was up 2.2% in January to March, but job numbers and overall exports are still dropping dramatically. The problem? Consumers seem to be buying too much stuff made overseas and not made in North America.

Meanwhile Americans cut spending on home building, commercial construction, equipment and software, and inventories of goods. Sales of U.S. goods to foreign buyers plunged. Even the U.S. government trimmed spending, despite the new stimulus package.

The recession, which officially began in December 2007 has become a technical depression (a depression is any recession that lasts longer than a year) and has removed 5.1 million jobs. Some economists believe the depression started in August 2007.

President Barack Obama is counting on his $787 billion stimulus of tax cuts and increased government spending on big public works projects to help bolster economic activity later in 2009. George W. Bush's bailout of the investment banks has seemingly done nothing to prevent the current crisis.

The recent outbreak of the swine flu, which has spread to the United States, poses a new potential danger. The flu is expected to stifle consumerism, trade, tourism and the death toll will wreak financial havoc.

No comments:

Post a Comment

Comments containing links will be marked as spam and not approved. We moderate every comment. If you want to advertise on this blog it is $30 per link.

Affordable Website Design & SEO

Looking for a quality professional website designer? Why not go where the smart money is?! Toronto Website Design and Toronto SEO. Get free SEO advice from people who really know the business.

Featured Posts

The Sarcasm Symbol
Ever had some confusion online or with your cellphone when someone fails to catch the sarcasm? Well now with the SarcMark you can ge...
Behold, the Scorpion Hydrogen Supercar
CARS - To the right is the future of supercars... it is a hydrogen supercar called the Scorpion. The Scorpion from Ronn Motors in Texas is t...
Documents show Stephen Harper misusing public funds
CANADA - According to 950+ pages of documents obtained by the Canadian Press under the Access to Information Act the Privy Coun...
Pink's Rosie the Riveter
ENTERTAINMENT - What I like about this video is how it meshes different social movements like feminism, veganism, anti-capitalism...
California's Dustbowl
ENVIRONMENT - The photo on the right is a farm in California that has been put up for sale. Its just one of thousands of farms that are n...
Is Steampunk the New Goth???
GOTHIC - Watch out what you see on the subway late at night because while in 2001 you might have seen some pretty freakish goths, by 20...
Do you have enough Ice Water in your diet?
HEALTH - A Calorie (large C) is a measurement of the amount of energy needed to raise the temperature of a litre of water (1 kg's worth) ...
North Korean timeline towards Inevitable War
POLITICS - The following is timeline of events that have occurred on the Korean Peninsula. 1945 - Japan surrenders to the United States a...
Judgment Day is Tomorrow, so sayeth Cult
RELIGION - According to a cult based in California, Judgement Day is tomorrow (May 21st 2011) and Jesus Christ will return to the Earth a...
Sex in Space Forbidden
SEX/TECHNOLOGY - Sex in outer space is a big no-no according to NASA. Not for professional astronauts at least, but the growing numb...

Popular Posts