Economic Outlook

Monday, November 17, 2008

• Nearly all major trading partners are reporting weak figures.
• Retail sales, many surveys of households, public budgets, unemployment and financial sector lending activities are issuing dismal reports on a domestic and global scale.
• The new fiscal year budget report for the US began with a large monthly deficit.
• The holiday shopping season is just beginning, but there is little optimism.
• The labor market situation is weak. New claims for unemployment insurance are as high as 32,000, bringing existing claims well over 500,000.
• Monthly job losses are rising and the unemployment rate is well above the full employment level.
• The international trade balance for September was on a contrarian path, reducing the nominal balance by nearly $3 billion, but the real deficit balance that has been steadily falling, in support of GDP, has reversed course and widened in September.
• Until the new government sets its policy targets and begins active economic policies, we are unlikely to experience a favorable turnabout for the economy.
• Our projections for the next three quarters, beginning with Q3 2008 are negative for growth.

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