U.S. Economy,since August
Tip:Manufacturing in the U.S. shrank at the slowest pace since August 2008 and pending sales of existing homes advanced for a fourth month, underscoring signs the economy began to stabilize in the second quarter.
Q:What is the situation now?
A:The Institute for Supply Management’s factory index rose in June for a sixth straight month, to 44.8; readings less than 50 signal contraction. The National Association of Realtors said the number of Americans signing contracts for existing homes increased 0.1 percent in May after a 7.1 percent gain.
“We’re going to see a temporary substantial improvement” in the economy, said Martin Feldstein, the Harvard University economist and former Reagan administration adviser who is a member of the U.S. recession-dating panel. “It’s a bounce that is coming from the beginning of the fiscal stimulus,” he said in an interview with Bloomberg Radio.
Q:Will the situation be worse?
A: Feldstein warned that the economy will be “going down again” into 2010. Underscoring that danger was a survey issued today by ADP Employer Services that showed U.S. companies eliminated 473,000 jobs in June after a 485,000 drop the previous month. The report also foreshadowed a jump in the unemployment rate in tomorrow’s Labor Department report that will temper any rebound in consumer spending.
Stocks advanced on optimism the worst of the recession, the deepest in half a century, is over. The Standard & Poor’s 500 Stock Index gained 0.4 percent to 923.33 at 4:16 p.m. in New York. Yields on benchmark 10-year notes were little changed, increasing to 3.544 percent from 3.535 percent late yesterday.
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January 25, 2012 @ 9:01 am
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