Keeping a Close Eye on Those 'Green Shoots'
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This is the VOA Special English ECONOMICS REPORT.
Signs that the recession is easing in the United States have led to a lot of talk about "green shoots." That means early signs of economic recovery, like the way plants begin to shoot up from the ground as a sign of spring. But the extent to which economic green shoots can be found depends on where you look.
Housing prices, economic activity and employment are down across the United States. But the recession which began at the end of two thousand seven has not hurt all fifty states equally.
Federal Reserve Chairman Ben Bernanke sounded more hopeful as he appeared Tuesday before the Joint Economic Committee in Congress.
BEN BERNANKE: "We continue to expect economic activity to bottom out, then to turn up later this year."
A big part of this prediction is based on signs that the housing market is beginning to improve. Falling prices have produced better deals for buyers, and this has helped the demand for housing. But the central bank chief warned that credit for home buying remains limited and dependent on government-supported programs.
Home prices in western states have fallen a long way and have continued to fall. Prices in Phoenix, Arizona, are now fifty percent below their highest levels of three years ago. But sales in the West increased by nineteen percent in March from a year before.
Sales of existing homes fell in other parts of the country. The National Association of Realtors reported the biggest decrease in the Northeast. There, sales fell by nineteen percent from a year ago.
In terms of unemployment, the troubles of the Detroit auto industry have hit Michigan in the Midwest especially hard. Its jobless rate was almost thirteen percent in March, the highest of any state. But western states had the highest rate as a group, almost ten percent.
Ben Bernanke expects a slow recovery, mainly because businesses are likely to limit hiring. So unemployment rates could rise even as the economy starts to recover. He also warned that the recovery could be threatened if any new problems hit the financial system.
Central to any recovery are the nation's banks. Late Thursday, the government released the results of a special examination, so-called stress tests, of the nineteen largest banks. Some will be required to raise billions of dollars of additional capital. This is meant to protect against possible losses should anything unexpected crush those green shoots in the world's largest economy.
And that's the VOA Special English ECONOMICS REPORT, written by Mario Ritter.