Malpass Says U.S. Economy Will Slow, Enter ‘Gloomy Period’

Vincent Del Giudice and Thomas R. Keene
Bloomberg News
Thursday, October 29, 2009

Oct. 29 (Bloomberg) — Economic growth in the U.S. will slow after the rebound in the third quarter and enter “a very gloomy period” of high unemployment, said economist David Malpass, president of Encima Global in New York.

“We are moving into this very gloomy new normal” of 2 percent growth and a “very high unemployment rate,” Malpass said today in an interview on Bloomberg Radio. As a result, “Washington will reach around and thrust around desperately” for new programs to boost growth.

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Gross domestic product expanded at a 3.5 percent pace from July through September after contracting during the previous four quarters, Commerce Department reported today.

In the fourth quarter, “you’re not going to have the consumption bump” fueled by the cash-for-clunkers auto-rebate program and other government stimulus efforts, Malpass said. “We’re getting a very weak recovery off the bottom,” he said.

Full story here.

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