Tags: Roubini | U.S. | Double | Dip | Recession

Roubini: U.S. In Danger of Double Dip Recession

By Dan Weil   |   Tuesday, 16 Mar 2010 09:16 AM

The U.S. economy is in danger of falling back into recession, as illustrated by recent weak statistics and thanks to Europe’s debt crisis, says star economist Nouriel Roubini.

In the executive summary of a report for clients of his firm Roubini Global Economics (RGE), Roubini writes, “A slew of poor economic data over the past two weeks suggests that the U.S. economy in 2010 is headed for — at best — a U-shaped recovery.”

The figures for consumer confidence, home sales, construction and employment suggest gross domestic product, or GDP, growth could fall well short of RGE’s already anemic forecast of 2.7 percent for the first half of the year.

“With the positive effects of the historic levels of fiscal stimulus due to fade this year, the U.S. faces at best a 1.5 percent growth rate in H2 (the second half), which looks too close for comfort to a tipping point of a double-dip,” Roubini writes.

Europe’s debt crisis puts the euro zone at risk of re-entering recession too, he says.

And even if that doesn’t occur, Europe’s slumping demand will hurt U.S. exports.

Diane Swonk, chief economist at Mesirow Financial, isn’t much more optimistic than Roubini.

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

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,” she said.

However, Brian S. Wesbury and Robert Stein, columnists for Forbes, are predicting 4.5% first-half growth, with faster expansion in the second quarter than the first.

The tilt toward the second quarter is due to unusually harsh winter weather across much of the country, they said.

"Productivity is strong, monetary policy is (and will continue to be) easy, inventories are razor-thin and corporate profits are growing rapidly," they said.

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The U.S. economy is in danger of falling back into recession, as illustrated by recent weak statistics and thanks to Europe s debt crisis, says star economist Nouriel Roubini. In the executive summary of a report for clients of his firm Roubini Global Economics (RGE),...
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2010-16-16
 

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