Brace Yourself for Even Worse 2nd Recession

Risk of recession at 26%; unemployment likely 9% at year's end

(NEWSER) - Despite a bombardment of bad news in recent weeks, economists don’t expect another recession over the next 12 months—but economic growth will barely be perceptible in that period, an AP poll of top economists finds. They expect high unemployment and weak consumer spending to dog the US into next year. Overall, the outlook is poorer than it was in June: That month, the 43 economists surveyed saw a 15% chance of double-dip recession; now, they report a 26% chance. More»

Economy grew just 1.3% over past three months

(NEWSER) - We already knew the Great Recession was the worst in decades, but in fact we were even worse off than we thought, new figures show. The economy shrank 5.1% over the course of the recession, from 2007 to 2009—1 percentage point worse than the earlier estimate of 4.1%, the AP reports. Only two in the past 10 recessions saw a squeeze of more than 3%. And yes, the economy is now growing—but it expanded only 1.3% from April to June, the Commerce Department said, lower than expected. More»

With no consumer spending, economy keeps dragging

(NEWSER) - There are plenty of theories and explanations for the economic crisis that has afflicted the United States for years now, but they all miss the element of the continuing malaise—it's really about the bursting of the decades-long consumer spending bubble, writes David Leonhardt in the New York Times . "Discretionary service spending" (think education and entertainment) has never fallen more than 3% in a recession in decades—in this recession, it has fallen 7%. "If you’re looking for one overarching explanation for the still-terrible job market, it is this great consumer bust," says Leonhardt. More»

Forecast fastest expansion in years on consumer spending

(NEWSER) - Economists are growing more optimistic about this year’s climate, predicting it will expand at its fastest pace since 2003, the Wall Street Journal reports. The paper polled 51 economists. Among the highlights:

• Economists see only a 12% risk of returning to recession, compared to 22% in September.
• In the 4th quarter of 2011, economists expect GDP to be 3.5% higher than a year before—beating last month’s prediction of a 3.3% increase.

Spending and home prices are up, but not enough to help jobs

(NEWSER) - The government’s optimistic reading of GDP growth in the 3rd quarter was distorted by a pair of rose-tinted glasses, it now says. The Commerce Department has revised its estimate down to 2.8% from 3.5% on evidence that stimulus programs like Cash for Clunkers and the homebuyers' tax credit did not spur as much spending as previously thought. Still, home spending was up 19.5%, and durable goods spending up 20.1%. More»