US economy heading back into recession
Data released over the last week indicates a significant deceleration in U.S. economic activity.
America’s job market is still struggling, while consumer confidence is falling – hurt in particular by rising petrol prices. In contrast, the demand for gold and silver is solid owing to growing fears about the depreciating value of the U.S. dollar. IBTimes
HIGHLIGHTS
Taking rapidly deteriorating economic data into account, expectations are growing that the Fed will begin a third round of quantitative easing at some point this year. beforeitsnews.com
Further government stimulus programs ala 2009 are unlikely now that the Republicans control the U.S. House of Representatives, and with arguments about raising the debt ceiling expected over the summer months. IBTimes
Consumer sentiment in the United States unexpectedly decreased last month to the lowest level in six months as Americans grew concerned over the outlook for jobs and the economy, while a measure of home prices dropped to a nine-year low. todayonline.com
Consumer finances have been squeezed by rising costs of food and fuel and erosion in home equity, causing spending to slow. A drop in petrol prices from a three-year high may bring households some relief, while a resumption of supplies disrupted by the earthquake and tsunami in Japan will benefit companies, giving the economy a lift in the last six months of this year. todayonline.com
U.S. house prices have fallen back to levels last seen in 2002 and consumer confidence has also fallen sharply according to new figures, leading to fresh fears about the country’s economic recovery. Guardian
FACTS & FIGURES
Voters are concerned about the U.S. budget deficit, which is expected to hit $1.4 trillion this year and stay in the trillion-dollar range for several years, given that negotiators in Washington are not expected to reach agreement on how to address the issue before November 2012. Economic Times
U.S. private-sector payroll growth slowed sharply in May, falling to the lowest level in eight months. Economic Times
A report by payroll firm ADP on June 1 found private sector jobs rose by only 38,000 in May, and other data showed the growth in U.S. manufacturing slumped seven percent in the same month. AFP
Analysts are also cutting expectations for new government employment figures on Friday, predicting between 80,000 and 175,000 jobs were created last month – down from 268,000 in April. AFP
Oil’s price falls were muted as weaker dollar pressured commodity prices. Reuters
A weaker dollar makes oil cheaper for those holding other currencies. Reuters
