Swonk: U.S. Economic Recovery Will Be Anemic

Thursday, 11 Mar 2010 08:31 AM

By Dan Weil

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The economic rebound is nothing to write home about, says Diane Swonk, chief economist at Mesirow Financial.

“Although I think we’ll avoid a double-dip (recession), we’re in a very anemic recovery, and it’s uneven,” she said.

What little growth there has been comes largely from government stimulus, she says.

While the former Bank One chief economist sees only a 10 to 20 percent chance of a double-dip recession, that’s still “way too high for me,” Swonk told CNBC.

“My current forecast still has growth reaccelerating to almost 4 percent by year-end. But that’s nothing to write home about given the depth of the recession.”

Swonk does see some signs of life in the economy. “We have strong manufacturing, and maybe we’ll even see employment improve,” she said.

“But the housing market still looks horrendous. They have to do some major effort to regain ground lost at the beginning of the year to say they’ve had a recovery.”

Others also are worried about the economy. A recent report from prominent economists, bankers and former regulators warns that without strong financial regulatory reform, we may fall right back into recession.

"Risk-taking at banks will soon be larger than ever," the report says.

“Another crisis — a bigger crisis that weakens both our financial sector and our larger economy — is more than predictable, it is inevitable," United Nations economist Rob Johnson wrote in the report.


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