Sep 29 - The latest economic report offers encouraging signs that the U.S. economy may avoid a second recession, but overseas pressures continue to weigh on the U.S. Jill Bennett reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Recession watch has become a national pastime...from Pennsylvania Avenue to Main Street USA. Yet the latest read on the economy offers a glimmer of hope...the gross domestic product report shows businesses spent money and factory output expanded in the second quarter. Nigel Gault, Chief U.S. Economist, IHS Global Insight: SOUNDBITE: NIGEL GAULT, CHIEF U.S. ECONOMIST, IHS GLOBAL INSIGHT (ENGLISH) SAYING: "If growth in Asia can remain robust that's very good news for U.S. exports. So exports and business equipment spending have been big pluses over the recovery so far." And there were some positive signs on the jobs front: fewer claims for jobless benefits. But that may not be enough to calm the recession fears: SOUNDBITE: NIGEL GAULT, CHIEF U.S. ECONOMIST, IHS GLOBAL INSIGHT (ENGLISH) SAYING "We also need to see and find out whether or not consumers in the United States and businesses in the United States are going to stabilize, stabilize their spending, stabilize their hiring or whether spending or hiring are going to spiral down together over the next few months into recession." Fanning the flames of recession worry: political haggling over budget policy, which could result in another government showdown, and a deepening debt crisis that started in Greece and is threatening to spread well beyond the euro zone. Those compounded worries erode confidence, leaving little wiggle room for the stumbling U.S. economy. SOUNDBITE: NIGEL GAULT, CHIEF U.S. ECONOMIST, IHS GLOBAL INSIGHT (ENGLISH) SAYING: "We're growing very slowly if at all so we're not in a position to absorb a big shock from abroad and just carry on. A big shock from abroad could tip us into recession, so the euro zone could take us down with them." Aside from that, the U.S. jobs market is still a big worry. A Business Roundtable survey shows the number of US CEO's who expect to cut jobs roughly doubled in the last quarter, which is likely to keep recession fears alive. Jill Bennett, Reuters