The outlook for the U.S. economy is “very dismal” because growth is coming from replenishing depleted inventories while stimulus measures are largely fueling consumption, says New York University economist Nouriel Roubini.
Most Americans will still feel like they are in a recession as unemployment rates will rise from current levels of around 10 percent, he says.
“I think we're in trouble,” Roubini told Bloomberg.
“It’s going to feel like a recession even if technically we’re not going to be in a recession.”
The U.S. economy grew 5.7 percent during the fourth quarter of 2009, when compared to the same period a year earlier, according to Reuters, the fastest pace in six years.
For Roubini, that growth rate will slow to 1.5 percent in the second half of 2010 as companies refill less inventories and stimulus measures ebb.
“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor.”
Others echo Roubini's forecasts for tepid growth, pointing out that businesses won't refill inventories forever and that private-sector demand won't be strong enough to fuel more robust economic growth.
“It's nice to have climbed out” from the deep recession, Richard DeKaser, chief economist at Woodley Park Research, tells the Investor's Business Daily.
“It's not a growth pace we should expect to continue.”
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