Growth Slowdown Seen for Third Year in U.S. Dodging a Recession
Bloomberg | June 4
The U.S. economy looks set to deliver a repeat performance in 2012: for the third straight year, it may suffer a swoon yet not slip into a recession.
“I don’t think the slowdown will be any more consequential than the past two years,” said John Ryding, a former Federal Reserve researcher who is chief economist at RDQ Economics LLC in New York. “There are positives out there in the economy. We’ll avoid a recession.”
Another lousy jobs report — is a second recession on the way?
Peter Morici (Fox News) | June 1
The May jobs report indicates growth could be even slower in the second quarter, and the economy is dangerously close to stalling and falling into recession…. Without prompt efforts to produce more domestic oil, redress the trade imbalance with China, relax burdensome business regulations, and curb health care mandates and costs, the US economy simply cannot grow and create enough jobs.
Recession storm clouds threaten global economy
June 1 | MSNBC
“Wow, this is ugly,” said Malcolm Polley, president of Stewart Capital Advisors, in response to Friday’s jobs data. “Some had believed that we had decoupled from China slowing and all the problems in Europe, but that seems to be shortsighted. We’re slowing alongside the rest of the world.”
Investors Brace for Slowdown
The Wall Street Journal | June 3
“We are not robust enough to withstand a real European recession,” said market strategist Edgar Peters, who helps oversee $18 billion at money-management firm First Quadrant in Pasadena, Calif. “I am getting less and less optimistic about this.”
Some economists and strategists believe the setbacks, in the U.S. at least, may be short-lived. Michael Darda, chief economist at brokerage firm MKM Partners in Stamford, Conn., told clients last week that the U.S. economy was still growing. Others said the prospect of more help from the Fed may limit declines. Those arguments didn’t lure many bargain hunters back to stocks last week.
Contrary to Popular Belief, the Recovery is not Stalling
Wells Fargo Economics Group | June 1
Nonfarm employment came in well below expectations in May, adding only 69K jobs with the unemployment rate drifting a notch higher to 8.2 percent. The details of the nonfarm payroll report suggest that weather could have been a driver for the weaker-than-expected outturn.
The ISM manufacturing survey weakened a bit, sliding 1.3 points to 53.5; however, the forward-looking new orders component jumped to 60.1, the highest level in 13 months, showing the continued resilience of the manufacturing sector.
Why the U.S. economy is stuck in the slow lane
USA Today | June 3
Economists initially blamed the slowdown on warm winter weather that pulled forward construction and other activity to early this year, damping spring sales and hiring. Mark Zandi, chief economist of Moody’s Analytics, says some weather-related payback was still at work in May, contributing to a loss of 37,000 jobs in construction and hospitality.
But many economists say the darker jobs picture can no longer be chalked up to weather. Zandi points to worries by U.S. corporations about Europe’s worsening financial crisis and says businesses’ uncertainty has held back hiring. IHS’ [Nigel] Gault says the stronger gains early in the year “were clearly out of line with the (weak) underlying pace of (economic) growth.”
Bleak U.S. jobs report a danger to global economy
Associated Press | June 3
“The U.S. is not an island, and what happens abroad matters here,” said Diane Swonk, chief economist at Mesirow Financial. “The weakness in Europe, in particular, has a global reach and is affecting us.”
This post originally appeared at The Capital Spectator and is posted with permission.