Longest Recession Since Great Depression

Economic statistics in the US still look very grim. GDP figures in the first quarter of 2009 show an annual rate of decline equal to - 6.1%. This follows on from a fall of -6.3% at the end of 2008. It also means the longest period of declining output since the Great Depression. The US entered recession before the UK. It does not bode well if the UK is to follow the US path (which has occured up until now.)

At least the US experienced a promising rise in consumer spending. Also inventory lists have fallen dramatically meaning that firms may be forced to start increasing stock. This would lead to rising output.

In the UK, consumer confidence improved to the best levels since August 2007 and problems of Northern Rock. A study by GfK NOP found consumers’ economic expectations for the next year is still in negative territory at -15, but this reflects an improvement of 16 points from -31 in March. This increase in confidence has occured despite rises in unemployment and falling average wage growth. (maybe the survey was taken on a sunny day?)

Related

• Implications of 2009 Budget (with video)

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