Fast-fading US recovery now looks even weaker

[OhioChick]

Source: Reuters

12 Aug 2010, 0451 hrs IST,REUTERS

WASHINGTON: US consumers will set the course for a gasping economic recovery that is starting to lose two of its strongest sources of support.

Economists have long expected that growth would slow in the second half of this year as government stimulus spending dries up, state and local governments slash outlays, and companies finish restocking lean inventories.

What they did not anticipate was that the economy would lose most of its momentum before the year was half over, a surprisingly swift slowdown that prompted the Federal Reserve to rethink its economic outlook and announce more steps to prop up the recovery.

"The anemic recovery just got even slower," said Jay Bryson, global economist with Wells Fargo in Charlotte, North Carolina.

Stock investors, reconsidering growth prospects, dumped shares on Wednesday, with the Dow Jones industrial average down 250 points by mid-afternoon.




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