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Moody’s Lowers Economic Growth Outlook

Posted By admin On August 16, 2011 @ 3:22 am In Money Watch | Comments Disabled

Tess Stynes
Wall St Journal [1]
Aug 16, 2011

Moody’s Analytics said its near-term outlook for the U.S. economy has fallen significantly in the past month wake of the debate over the U.S. debt ceiling and the downgrade of the nation’s credit ratings by Standard & Poor’s .

Moody’s Analytics, a sister company to credit-ratings company Moody’s Investors Service, now expects real gross domestic product to increase at an annualized rate of about 2% in the second half of this year and just over 3% next year, compared with its estimate a month ago for growth of 3.5% for the second half of this year and through 2012.

The firm attributes most of the expected decline to a loss of business, investor and consumer confidence, noting the economy’s improving fundamentals such as the strengthening of business’s balance sheets and consumers’ strides in cutting household debt.

The credit-rating company also said it thinks the odds of a renewed recession over the next 12 months — now at 1 in 3 — will increase if stock prices continue to fall. Moody’s maintains that the odds of a renewed recession rise with each 100-point drop in the Dow Jones Industrial Average. While Moody’s expects the economic recovery will continue, prospects for economic growth and job creation have “diminished substantially.”

Full article here [1]

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[1] Wall St Journal: http://blogs.wsj.com/economics/2011/08/15/moodys-lowers-economic-growth-outlook/

[2] Image: http://www.prisonplanet.tv/

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[4] U.S., U.K. Move Closer to Losing Rating, Moody’s Says: http://www.prisonplanet.com/u-s-u-k-move-closer-to-losing-rating-moody%e2%80%99s-says.html

[5] China Boldly Goes (Again) Where Moody’s Has Never Gone Before, Downgrades US From A+ To A, Outlook Negative: http://www.prisonplanet.com/china-boldly-goes-again-where-moodys-has-never-gone-before-downgrades-us-from-a-to-a-outlook-negative.html

[6] Debt Level, Spending Pose Risk to U.S.’s Aaa Credit Rating, Moody’s Says: http://www.prisonplanet.com/debt-level-spending-pose-risk-to-u-s-s-aaa-credit-rating-moodys-says.html

[7] Moody’s Downgrades Italy, Spain, Portugal And Others; Puts UK, France On Outlook Negative – Full Statement: http://www.prisonplanet.com/moodys-downgrades-italy-spain-portugal-and-others-puts-uk-france-on-outlook-negative-full-statement.html

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