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WORLD> America
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US economy leveling off, but bumps not over
(Agencies)
Updated: 2009-04-10 09:16 WASHINGTON – At last, after a nerve-racking six-month descent, the US economy appears to be leveling off. But don't assume the bumps are over.
There were fresh signs Thursday that the full force of the recession may be petering out: a strong profit forecast from Wells Fargo, a drop in unemployment benefit filings and several retailers predicting solid April sales. On Wall Street, the Dow Jones industrials rose nearly 250 points.
Still, with unemployment rising, it will be at least several months before the country's economic engine pops into a growth gear. Job losses -- and the fear of them -- act as a headwind against consumer confidence and spending, which account for more than two-thirds of the US economy. "The sense of a ball falling off a table, which is what the economy has felt like since the middle of last fall, I think we can be reasonably confident that that is going to end within the next few months, and we will no longer have that sense of a free-fall," President Barack Obama's top economic adviser, Lawrence Summers, said Thursday. But Summers, who spoke at the Economic Club of Washington, said it was too soon to forecast how strong the rebound would be and when it would take hold. The economy shrank at a 6.3 percent rate in the final three months of 2008, the worst showing in a quarter-century. Some economists say it fared about as poorly in the first three months of this year, while others expect a 4 to 5 percent rate of decline. The government releases its initial estimate at the end of April. |
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