My Account Menu

CAPA Login

Register to trial CAPA Membership!

The good news and the bad news about the US economy

  • 2H09 "may see a period of anemic growth" - The Conference Board.

The US economy may have seen the first glimmer of positive news - but it is only a glimmer. The Conference Board reported the Leading Economic Index for the US increased 0.4% in Jan-09, following a 0.2% increase in Dec-09.

The Conference Board Economist, Ken Goldstein, stated, "the economy has been in recession for over a year, but the level of intensity may begin to ease over the next few months". He added, "the second half of 2009 may see a period of anemic growth".

But the bad news is a return to robust growth "may not occur until well into 2010, even if the long climb starts a few months from now", according to Mr Goldstein.

US Leading Economic Index and Coincident Index (2004 = 100): Jan-06 to Jan-09

The US Federal Reserve has also given up on growth this year. It now projects the economy would shrink by between 0.5% and 1.3%, according to the minutes of its 27/28-Jan-09 policy meeting released this week. Unemployment is expected to reach almost 9%, up from its present level of 7.6%. The previous GDP forecast (released in Oct-08) was for a decline of 0.2% to growth of 1.1% in 2009.

The near term outlook remains bleak, but the much hoped for recovery from late 2009 may just have some supporting evidence, though it is still early days.

Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.