Sunday, July 26, 2009

A Weak Recovery in the US




Writes David Altig, senior vice president and research director at the Atlanta Fed, on July 24:

“The chart plots the four-quarter growth rate of gross domestic product (GDP) from the trough of a recession against the depth of the corresponding contraction, as measured by the cumulative loss of GDP over the course of the downturn. (…)

The points within the red circle represent all previous postwar recessions. They show that the deeper the recession the faster the recovery. (…)

The points within the blue circle are based on forecasts of GDP growth from the third quarter of this year through the third quarter of 2010, from the Blue Chip Economic Indicators (which report survey results from “America’s leading business economists”).”

He also quotes Atlanta Fed President Dennis Lockart, for saying:

“The recovery will be weak because the economy must make structural adjustments before the healthiest possible rate of growth can be achieved.”



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