Tuesday, August 2, 2011

Recession 2011

The risk that the U.S. economy will lapse into another recession has gone up in the past six months, said Christina Romer, former chairman of the White House Council of Economic Advisers.
“The risks have gone up for another recession compared to where we were six months ago,” Romer said in a television interview on “Bloomberg Street Smart” with Carol Masser and Matt Miller. “That’s still not my best estimate of where we’re headed, but it’s certainly a bigger risk today than it was in the past.”
The U.S. economy grew less than forecast in the second quarter, after almost stalling at the start of the year. Gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed July 29 in Washington.
Manufacturing in the U.S. almost stalled in July, threatening to deprive the recovery of one of its main drivers. The Institute for Supply Management factory index dropped to 50.9, the lowest since July 2009, from 55.3 the previous month, the group reported today. Figures less than 50 signal contraction.
The U.S. economy is headed for “more of the same” which is “anemic, but positive growth,” said Romer, 52, an economics professor at the University of California-Berkeley
“Certainly the closer you get to zero growth, the more likely it is you are going to get a negative number at some point,” she said in the interview.