EconomicCrisis.US

Chief financial officers in the U.S. are less confident the recovery in the world’s largest economy will accelerate in 2012 as government policy weighs on growth, according to a Bank of America Corp. survey.

Forty-nine percent of finance heads projected the U.S. economy will grow next year at about the same pace as this year, according to the results of an annual poll taken by the second- biggest U.S. bank by assets. Thirty-eight percent see a pickup, down from 56 percent in last year’s survey and 66 percent a year earlier. Respondents also rated the economy 44 out of 100, the lowest since the survey began in 1998.
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The U.S. Federal Reserve shouldn’t be too enthusiastic about tightening monetary policy soon as there is still significant slack in the economy, a top central bank official said on Monday.

Oil prices could push up headline inflation, but central bankers shouldn’t over-react as this is likely to be temporary and could lead to a monetary policy mistake, New York Federal Reserve Bank President William Dudley said after giving a speech in Tokyo.

U.S. economic activity has slowed in the past few months as oil prices weigh on sentiment, Dudley said. Economic recovery isn’t assured and wage growth remains low, he said.
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Oil prices fell to near $90 a barrel today as a disappointing U.S. jobs figure and a move by China to cool off economic growth dampened expectations of higher crude demand.

By early afternoon in Europe, benchmark oil for February delivery was down $1.06 to $90.34 a barrel in electronic trading on the New York Mercantile Exchange. Crude lost 46 cents to settle at $91.40 on Thursday.

The Labor Department said Thursday that more people filed for unemployment aid last week in the U.S., tempering optimism that a strong economic recovery is under way.
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One outcome of the U.S. midterm elections is that the results have effectively marginalized the executive branch when it comes to dealing with the economy. The debate over stimulating the economy versus shrinking the deficit has been concluded and the winner is . . . paralysis.

The GOP majority in the House of Representatives will prevent the government from taking substantive action. Any hope for goosing the economy will have to come from the Federal Reserve. The Fed has taken up that challenge with its decision last week to pursue another round of quantitative easing. It is not clear if “QE2,” as the move is known, will do the trick. If it does not succeed, the United States could be running out of options.
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