Tags: Greenhaus | US | Recession | economy

Dan Greenhaus: US Can Slip Back Into Recession in a Snap

Thursday, 22 Dec 2011 07:48 AM

The U.S. economy is showing signs of finally recovering at a more sustained pace although investors should consider history has shown that downturns in the U.S. often follow spikes in growth, says Dan Greenhaus, chief global strategist at brokerage BTIG.

"As attention turns to 2012, one client asked us today how we could see a negative GDP print in 2012 if the economy is going to grow by 4.0 percent in Q4," Greenhaus writes in a note, according to Business Insider.

"Ignoring the specifics and probabilities of such a call, we replied quite simply: GDP grew by 3.6 percent in Q2 2007, was negative in Q1 2008; GDP grew by 8.0 percent in Q2 2000, was negative in Q1 2001."
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The trend continues.

"GDP grew by 4.2 percent in Q1 1990, was negative in Q4 1990, and GDP grew by 8.6 percent in Q1 1981, was negative the very next quarter."

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(Getty Images photo)
Economic recovery may have hit a roadblock recently when House Republicans blocked a bill that would extend a payroll tax cut due to expire at the end of this year. economists say.

"Given that the payroll tax holiday is having a meaningful impact, removing it would mean we're essentially at stall speed for the economy, and we would become quite worried about the expansion," says Sal Guatieri senior economist with BMO Capital Markets, according to CNNMoney.

Others agree.

"The point is that the economy looks to be getting some traction and this is the wrong time to stop pushing," says Robert Brusca of FAO Economics, CNNMoney adds.

"The resulting backsliding could easily cost us much, much more growth."

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The U.S. economy is showing signs of finally recovering at a more sustained pace although investors should consider history has shown that downturns in the U.S. often follow spikes in growth, says Dan Greenhaus, chief global strategist at brokerage BTIG. As attention...
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2011-48-22
Thursday, 22 Dec 2011 07:48 AM
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