Tags: European debt | U.S. GDP | unemployment rate | consumer confidence

Economists: Europe Will Hinder Growth of Struggling U.S.

Friday, 11 Nov 2011 02:03 PM

The European debt crisis will continue to hinder the U.S. economy, keeping the country stuck in a period of sluggish growth, experts say.

A Wall Street Journal survey of 52 economists put the odds at 1-in-4 that the U.S. will experience a recession in the next 12 months.

The good news is that figure is down from a 1-in-3 chance the survey found just two months ago.

The bad news is Europe's chances stand at 2-in-3, which could further dampen U.S. recovery.

"While the likelihood of a recession [in the U.S.] has eased of late, the economy is still operating at only a modest pace and remains vulnerable to shocks," says Julia Coronado at BNP Paribas, according to the Wall Street Journal.

The European debt crisis, meanwhile, is spreading from Greece to the much larger Italy, spooking markets in the process.

"Italian default or debt restructuring would be Lehman on steroids," says Paul Ballew of Nationwide, who adds a recession in Europe is probably already underway, the Journal adds.

While the U.S. may officially be in growth mode, high unemployment rates of around 9.0 percent make is feel like the country remains locked in contraction.

Furthermore, consumer confidence levels are at their lowest levels since 2009, according to the Conference Board, which tracks consumer attitudes.

"Consumer confidence is now back to levels last seen during the 2008-2009 recession," Lynn Franco, consumer research director of the Conference Board, told the AFP newswire recently.

"Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased."

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The European debt crisis will continue to hinder the U.S. economy, keeping the country stuck in a period of sluggish growth, experts say.A Wall Street Journal survey of 52 economists put the odds at 1-in-4 that the U.S. will experience a recession in the next 12 months.The...
European debt,U.S. GDP,unemployment rate,consumer confidence
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2011-03-11
Friday, 11 Nov 2011 02:03 PM
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