Saturday, January 30, 2010

US economy rebounds growth dismal and poor.

Roubini Calls U.S. Growth ‘Dismal and Poor,’ Predicts Slowing -

New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth “very dismal and poor” because it relied on temporary factors.
Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.
“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “I think we are in trouble.”

Saving every nickel and dime.

Payrolls fell by 85,000 last month after a 4,000 gain in November that was the first increase in almost two years. The U.S. has lost 7.2 million jobs since the start of the recession in December 2007, the most of any slowdown in the post-World War II era. The jobless rate held at 10 percent in December.
“Both consumers and businesses are beginning to increase spending. To get validation, we need to see a return in hiring, which we think we are going to get over the next few months.”
Obama this week said job creation will be the “number one focus in 2010.” Speaking during his first State of the Union address, Obama called on Congress to deliver a new jobs bill to his desk.
President Barack Obama has embraced a contradiction. He wants both a freeze of a lot of discretionary spending and a new “jobs” bill — which is made up entirely of new discretionary spending.
Before the House of Representatives’ recess last year, it passed, by a narrow 217-212 vote, a $155 billion stimulus bill to fund more “shovel-ready” projects and jobs for state and local government bureaucracies. Its passage raised a serious question that still must be answered. The $700-plus billion stimulus package that was passed in February has proved a failure in just about every way a piece of legislation can fail. Why continue on with a second stimulus or a new jobs bill?
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