EconomicCrisis.US

The US economy regained momentum in the fourth quarter of last year, boosted by buoyant exports and the strongest consumer spending in more than four years.

GDP figures released today raised hopes that a sustainable recovery is under way, which will enable businesses to start hiring again.

The world’s largest economy grew at an annualised rate of 3.2% between October and December, according to the US Commerce Department, faster than the third quarter’s 2.6% rate. Economists had expected growth of 3.5%.
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While the UK Government frets about happiness (or the lack of it), the US Administration worries about jobs. America doesn’t have enough of them. On Friday, we learnt that the US unemployment rate had, unexpectedly, jumped to 9.8 per cent in November from 9.6 per cent in the previous month, only a whisker below the 10.1 per cent peak recorded in October of last year. America’s much-vaunted labour-market flexibility is badly misfiring. Despite a massive policy stimulus, not enough people are managing to get back to work.
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The International Monetary Fund’s top official Monday acknowledged faster-than-expected global economic recovery, but cautioned governments against paring their anti-crisis measures too quickly, saying doing so could set off another downturn.

IMF Managing Director Dominique Strauss-Kahn noted that private sector demand is “still very weak” in most nations, while jobless rates could rise in the U.S., Europe and Japan in the months ahead.

His remarks underscore that despite signs of rebound in the global economy, many key international players still find it too soon for policymakers to start withdrawing from the extraordinarily stimulus steps they have adopted over recent years to fight the global economic crisis.
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In 2008 and 2009, Washington strove to save the economy. In 2010, Americans will get a clearer picture of how Washington has changed the economy.

Only as the recession recedes will it become fully evident how permanently the state’s role has expanded and whether, as a consequence, a new, hybrid strain of American capitalism is emerging.

One thing is clear: The government is a much bigger force in today’s U.S. economy than it was before the financial crisis. “The frontier between the state and market has shifted,” says Daniel Yergin, whose 1998 book “Commanding Heights” chronicled the ascent of free-market forces starting in the 1980s. “The realm of the state has been enlarged.”
[USA INC]
Previously in USA Inc.
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