The United States appears to have averted a default with a theatrical last-minute agreement to raise the debt ceiling. But it must now grapple with what appears to be the growing threat of a new recession. Consumer spending contracted for the first time in two years in June. At the same time, manufacturing grew at its weakest pace in two years in July, suggesting the third quarter has not gotten off to a very good start.
U.S. and Japanese monetary policy does not always move hand in glove, but meetings of the countries’ respective central banks in the next few days are likely to spell out the same thing — that the job of economic recovery is by no means over.
After financial firms slashed hundreds of thousands of jobs in 2007 and 2008, the bloodletting slowed in 2009 as major banks rebounded from the financial crisis. Even though firms like Goldman Sachs Group Inc and JPMorgan Chase & Co reported billions of dollars in profit, they still did not announce major hiring initiatives.
Michael Pettis, a professor and China expert at the Carnegie Endowment for International Peace, has put together a thorough and informative look at all things U.S.-China trade. It’s well worth reading and watching the entire thing, but here’s a few highlights that jump out:
from UK News:
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Chancellor Alistair Darling threw the dice in his pre-budget report in an attempt to bolster Labour's chances of winning the general election in 2010.
It may not get as much attention as the monthly employment report or GDP figures, but the U.S. Federal Reserve Bank of Chicago’s gauge of the national economy has a good track record of distinguishing economic expansions from recessions. And it’s suggesting that the U.S. recovery may be wobbling.