Former Clinton White House economic advisor Nouriel Roubini is saying the U.S. economy is "improving," as the economic contraction is not going to be as severe this quarter as it was last quarter.
In an interview with publisher Steve Forbes, the professor at New York University said the global economy, as a result, will avoid "a depression."
"The degree of economic contraction is not going to be as severe as the last quarter of last year and first quarter of this year. So, from negative 6 [percent] growth, we are going to go toward negative 2 [percent] toward the end of the year," said Roubini.
Roubini said that some optimistic economists have said that there may be positive growth for the U.S. by the end of the year. But he does not embrace that view.
"Maybe it is going to be below 1 percent and unemployment rate above 10 percent. So while we are going to be technically out of a recession, you know, it is going to feel like a recession," said Roubini.
That means that the U.S. is "going to eventually get out of it by sometime next year. That is good news," said Roubini.
Roubini, however, put this in perspective. He said that if discouraged workers and part-time workers who cannot find work are included in unemployment figures, it is likely that unemployment will be 15 percent.
"So by some standards, this is really rough, worse than losing 600,000 to 700,000 jobs per month. It's very painful," said Roubini.
The economist is not keen on Wall Street's recent, minor rallies as a leading indicator of growth, moreover.
"The stock market predicted six out of the last zero economic recoveries, because six times around, the last two years, markets fell because of the bad news on banks. The economy, then there is radical policy action. They recover, and then the bad news, macrofinancial earnings and then you reach a new low," said Roubini.
"Now of course, the lower you go, at some point, you might be closer to a true bottom."
There is a downside to all of this. Even if the economy recovers and begins growing again, the deficit spending of President Obama will harm future economic stability.
"There is ample historic evidence of the link between fiscal profligacy and subsequent inflation," writes Martin Feldstein, a former White House economist for President Reagan, and a member of the Economic Recovery Advisory Board for Obama, in the Financial Times.
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