Recession Easing, but Many Americans Still Afraid to Spend
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This is the VOA Special English ECONOMICS REPORT.
Stock prices took a roller-coaster ride this week -- down one day, up the next. Experts say the situation is likely to continue until investors feel more sure about signs of economic recovery.
Some investors worry that Americans are not doing enough to lift the world's largest economy out of recession. This is back-to-school season. But the National Retail Federation says school-related sales are down from last year.
MOTHER: "I don't want to spend more than twenty dollars for a backpack."
Consumer spending is seventy percent of the economic activity in the United States. But consumer confidence -- a measure of trust in the economy -- fell unexpectedly this month. A lot of people feel uneasy about spending after the longest recession since World War Two.
WOMAN: "My situation is fine, but I am still aware that I could lose my job at anytime, and there's still no definite security. That's why I am paying attention more."
Jobs have continued to disappear, though at slower rates. Record numbers of Americans are in danger of losing their homes. And the days of easy credit are gone. The Treasury Department says lending fell for a fifth month at banks that received government aid.
Still, some economists say other signs in the economy show that the recession is over already, or will be soon. Then the question is: how fast or how slow will the recovery be?
The recession may also be ending in Japan. Japan has the world's second largest economy. Officials reported this week that the gross domestic product grew nine-tenths of one percent between April and June. It was the first growth in Japan's economy in fifteen months.
But there are concerns that Japan and the United States could face a "double-dip" recession. That is a period of growth followed by another downturn. Japan will hold national elections on August thirtieth. Public opinion surveys show the main opposition party in the lead.
In Europe, reports last week showed a year of recession easing in Germany, its largest economy, and in France. Both countries had growth of three-tenths of one percent between April and June. That news raised hopes for an early recovery among the sixteen countries that use the euro.
Still, the chief economist of the International Monetary Fund says the effects of the world economic crisis will hurt both supply and demand for years to come. Olivier Blanchard says even after recovery, the global economy may not produce as much as it did before.
And that's the VOA Special English ECONOMICS REPORT. For the latest news, and for transcripts and podcasts of our reports, go to voaspecialenglish.com. I'm Steve Ember.
Includes reporting by VOA's Mil Arcega