Is the recession off? Housing holds key
Stock markets are up sharply since March. The recent batch of economic data has not looked as dire as feared. The U.S. Federal Reserve is finding fewer takers for its loan auctions. A fine-art sale drew a record $86 million price for a Francis Bacon painting.
So is the U.S. recession off? So far, so good — or at least not so bad. However, there are still quite a few dark clouds on the horizon.
“Although GDP has been stagnant, the economy does not look to have slipped into an outright contraction during the first half of the year,” said Bruce Kasman, chief economist with JPMorgan in New York.
While that is not exactly a ringing endorsement, it is certainly a vast improvement from the bleak projections that were the norm just a few weeks ago, when markets were braced for economic disaster.
With euro zone growth coming in stronger than expected for the first quarter and emerging markets showing resilience to the slowdown in the developed world, the financial doom and gloom has given way to a renewed sense of optimism.
“The general picture that emerges is that while global growth is clearly slowing, so far it has not slowed as dramatically as many had expected,” said Goldman Sachs global economist Peter Berezin.
“What will ultimately matter most is whether the better-than-expected growth momentum in the first quarter persists into the rest of the year quick payday loan. Here, the evidence is more worrisome,” he added, pointing to the still-strained U.S. housing market, sluggish consumer demand and cautious spending on the part of businesses.
HIGH ON THE HOG