An article in the Buffalo News this morning takes a look at an economic forecast that sees a further worsening of the nation's economy throughout this year with an upswing due to start in 2010 and gain momentum in 2011.
From the article:
The economy is expected to remain feeble this year - even with new efforts by the administration and Congress to provide relief.
Just over the past few weeks, a $787 billion recovery package of increased government spending and tax cuts was signed into law, the president unveiled a $75 billion plan to stem home foreclosures and Treasury Secretary Timothy Geithner said as much as $2 trillion could be plowed into the financial system to jump-start lending.
In terms of lost economic activity in 2009, the biggest hit will come in the first six months, forecasters said.
Even in the best-case scenario, with the recession ending sometime in the second half of this year, employment conditions will be tough.
Some of the forecasters said the nation's unemployment rate could rise as high as 9 percent for all of 2009 and hit 10 percent next year. In 2008, the jobless rate averaged 5.8 percent, the highest since 2003. The survey's median forecast - or middle point - called for the unemployment rate to rise to 8.4 percent this year and 8.8 percent next year.
Companies touching every part of the economy have announced thousands of layoffs already this year and more cuts came last week. Goodyear Tire & Rubber Co., said it will cut nearly 5,000 jobs, or almost 7 percent of its work force, this year, following the elimination of about 4,000 jobs in the second half of last year. General Motors Corp. and Chrysler, which are asking the government for billions more in aid to remain viable, announced plans to cut 50,000 more jobs, 47,000 of which would be at GM.
What do you think? Will we start to pull out of this at the end of this year? Or will the vicious cycle suck us further down?Where do you think the economy is headed?