The Recovery Plan Still Not Working

The first quarter of 2009 was the worst in decades for the United States. The three pillars to test the strength of its economy from the crisis showed worse than expected numbers: they lost 5 million jobs, the activity seems to have made nearly 5% annualized and the Case-Shiller index (which measures the value of dwellings) seems to slip at an annualized rate of 22%. In this context, Obama’s administration tried to keep pace, launching a festival plans to revive the economy, fighting on three interrelated fronts (real estate, financial and real). Despite the criticism he is receiving the Government for its handling of the economy seems to have some “green shots” or “good news” that could start generating an air of hope to the struggling economy would improve its medium-term outlook . One example is the slight recovery in the property sector, driven by sales of new and used homes, which by the low prices have become “Buying opportunities.” Also it should be emphasized that the increase has been showing consumer confidence, which could impact the second and third quarter. Finally, requests for unemployment insurance fell more than expected, although this is affected by the holidays, so that the adjusted figure would be closer than expected (658 000 new orders) but at a slightly lower level ( 651 000 new orders). For even more details, read what Robert J. Shiller says on the issue. However, still there is evidence that pessimism is justified.

The 1.5% drop in industrial production (greater than expected), the aforementioned decline in jobs and the collapse of retail sales after having shown a good thing the previous month (except cars). For its part, the job prospects are not the best, and in March reached 8.1% unemployment, which was the figure last year was estimated to total 2009. Reassessed and adjusted according to the number of unemployed people reached nearly 10% of the EAP end of this year. Finally, it is expected that inflation is not an issue in 2009, which is reflected in the words of Fed officials, however, it is estimated that after the economy starts to show signs of recovery begin attempt to reverse the “helicopter” with a “vacuum.” Beyond the criticism of economists, the government’s plan to revive the U.S. would some momentum to the economy. The basic question is whether the pickup in growth will be accompanied by a deepening of the controls and greater regulation of banking. The issue now seems suspended in the agenda. Source:

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