Weak growth for years: Economy may be stuck with high unemployment
By Daniel at 7 August, 2009, 3:52 am
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Excerpt:
There’s growing optimism about signs of life in the economy — expected to be capped with Friday’s report showing continued slowing in the pace of job losses. But this recovery, when it comes, won’t feel like any in memory.
The reason is that consumers — the mainspring of the economy — remain hunkered down. Growth is still coming from cost-cutting and federal spending, not from a pickup in real demand. And with 7 million workers sidelined by this recession, that headwind likely will be blowing for several years.
“We’re not going to go back to where we’ve come from,” said Mohamed El-Erian, CEO of PIMCO, a global investment management firm. “There’s still an assumption out there in the marketplace that somehow this was a very nasty cyclical fall, and we’re going to go back to where we’ve come from. That’s not what’s going to happen.”
http://www.msnbc.msn.com/id/32314827/ns/business-eye_on_the_economy/
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