The biggest slump in U.S. consumer spending since 1942 will extend the recession and push the jobless rate to the highest level in a quarter century, according to economists surveyed by Bloomberg News.
Household spending will drop 1 percent in 2009, the biggest decline since after the attack on Pearl Harbor, according to the median estimate of 51 economists surveyed Dec. 4 through Dec. 9. By the middle of next year, the economy will have shrunk for a record four consecutive quarters, the survey showed.
“That sounds scary enough to me,” said Jeffrey Frankel, an economics professor at Harvard University and a member of the group that determined the start of the recession. “Consumers have carried the weight of expanding demand for a long time at the expense of a serious deterioration of their balance sheets.”
(ARTICLE CONTINUES BELOW)
A drop in spending has brought the auto industry to the brink of collapse, and mounting unemployment, a lack of credit, and falling property and stock values will prompt Americans to turn even more frugal. President-elect Barack Obama has pledged to pursue the biggest public-works plan since the 1950s to stem the already year-old economic slump.
“It’s a serious recession, and there’s a good chance it will break the 16-month record since the Depression,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. “We’re at the stage where the weakness is feeding on itself. The next few months look pretty rough.”
Longest Slumps
The National Bureau of Economic Research last week announced the U.S. contraction began in December 2007. The longest economic slumps since 1945 were the 16-month downturns that ended in March 1975 and November 1982. The Great Depression lasted 43 months, from August 1929 to March 1933.
A report from the Commerce Department today showed wholesale inventories fell 1.1 percent in October, the most in seven years, as a record 4.1 percent drop in sales caused companies to scale back.
December 10th, 2008 at 2:40 pm
Here comes the amero and rex 84 camps for edgy, agitated citizens. Do the research and pepare. with a hug, one of the watchers.
December 10th, 2008 at 5:29 pm
You are right watcher. Excuse me if I don’t join the watchers or go quietly to the camps.
Wake up boys, there’s a light at the window,
I can hear someone knocking on the door,
There are voices in the street,
And the sound of running feet,
And they whisper the word –
“Revolution!”
There are men coming down from the valleys,
There are tall ships lying off the coast,
And they carry the light,
In the dark of the night,
Like a whisper in the wind –
“Revolution!”
Bring my gun and a handful of silver,
By the sea we will gather for the fight,
It’s been so many years,
So many tears,
We have lost once before,
Now we’ll settle the score,
When our cannons will roar –
“Revolution!”
Watch and Wait get ready for the sign
There are many here among us now have not seen the light
We must send the word to all the people in the land
Go To Every hill and mountain for the time is now at hand to
Light Your Fire
Light Your Fire
You’ll See Tonight!!
December 11th, 2008 at 2:34 am
Looks like they have finally begun squeezing the middle class dry of money.