Sunday, April 26, 2009 at 04:55PM | William L. Exeter More Good Economic News: The "Unremitting Freefall" Has Ended!
President Barak Obama's economic advisor Lawrence Summers commented that the sense of "unremitting freefall" in the United States economy has ended and the picture is no longer completely negative, but rather mixed. Mr. Summers also stated that the "vast majority" of United States commercial banks are well capitalized.
Mr. Summers also said that "six or eight weeks ago, there were no positive statistics to be found anywhere. The economy felt like it was falling vertically. Today, the picture is much more mixed.
There are some negative indicators, to be sure. There are also some positive indicators. And no one knows what the next turn will be," he said. "But I think that sense of unremitting freefall that we had a month or two ago is not present today. And that's something we can take some encouragement from."
The United States economy, which is now in its 16th consecutive month of recession, shrank at a 6.3 percent annual rate in the fourth quarter of 2008, the steepest quarterly plunge in more than 26 years. Economists expect a report on Wednesday to show it slipped a further 5 percent in the first three months of this year. But, steep drops in consumer spending and home sales appear to be easing, raising hope the worst may be over.
The Group of Seven (G-7) industrial powers also reached the same conclusion this last week about the global economy. It is important to note that an easy is not the same as a recovery, but generally indicates that we have past the worst of the economic cycle and are nearing the start of a slow recovery.
Reader Comments