50 Percent Chance US Will Go Into Recession By End of 2008
Isn't the US already in a recession? Not quite....but almost!
Americans are losing their jobs at a steady clip, Ben Steverman of Business Week reported this week. According to a Labor Dept. report released Sept. 5, the unemployment rate hit 6.1% in August, and U.S. payrolls dropped 84,000-with both numbers worse than economists were expecting.
Some are certain that recession lurks.
"This is a very weak jobs report that screams recession," wrote John Ryding and Conrad DeQuadros, partners in the New York forecasting firm RDQ Economics.
Peter Kretzmer, a Bank of America economist, added in a note to investors that the "rapid rise in the unemployment rate points to a U.S. recession, as such an increase has never occurred outside of one."
Recession fears have reignited on evidence that job losses are picking up steam, Kevin G. Hall of the Kansas City Star writes. The Bureau of Labor Statistics on Friday revised the June and July unemployment numbers upward, virtually doubling the original estimate for June job losses from 51,000 to 100,000. Most of the job losses this year - 1.75 million - have come since April.
"Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points, with most of the increase occurring over the past four months," the BLS report said.
In August, 9.4 million Americans were unemployed.
Great Britain has all but confirmed a recession is imminent in that country by year's end.
Britain will plunge into recession this year to join the ranks of the worst- performing economies in Europe, the European Commission said yesterday.
Recession is also looming for Spain, while Germany, Europe's biggest economy, is in the middle of a recession, the Commission said. However, Britain is among the hardest-hit economies, with an expected 0.2 per cent fall in output in the third and fourth quarters of the year.
Howard Archer, of Global Insight, the consultancy, Told the Times Online that the UK had joined the Republic of Ireland, Spain and Italy among the worst-performing economies in Europe. "It is no coincidence that Spain and Ireland have a housing market that is very similar to ours," he said. "Despite a possible recession in Germany, our economy is fundamentally in a worse state."
land, Spain and Italy among the worst-performing economies in Europe. "It is no coincidence that Spain and Ireland have a housing market that is very similar to ours," he said. "Despite a possible recession in Germany, our economy is fundamentally in a worse state."
Philip Shaw, chief UK economist for Investec, said that a recession in Britain was now more than likely. He said: "We are stronger than the stragglers in Europe, but we are no longer stronger than the eurozone as a whole."
Gamblers are betting nearly 50 percent at the prediction markets that a recession will officially hit the US in 2009 but only 17 percent were betting on one by December 31, 2008. Nearly 53497 bets have been placed on a 2008 US recession at intrade.com.
By comparison, 40 percent of people believe that Great Britain will tumble into a recession before this year is over. 60 percent say they will be in one by the end of 2009.
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Jagajeet Chiba, Gambling911.com
