So now more economists are tipping a double dip recession. It's looking more and more likely.
CNN Money reports that economists are now putting the odds of the US slipping into another recession at anywhere between 20% to 30%. .
Check for example this warning from Philippe Gijsels, the head of research at BNP Paribas: "I see quite a lot of market participants who talk about economic figures and corporate figures still being strong, which are, to a large extent, rational arguments," he said. "The only problem with these figures is that they give a rear view mirror perspective. They give us a valuable inside about the past, but fail to answer the question how much the economies in the US and even more so in Europe will slow down in the second half of the year and going into 2011."
While Federal Reserve chairman Ben Bernanke is playing down the prospect of a second recession, The Wall Street Journal reports that Federal Reserve officials are worried about the impact of fiscal woes in Europe, stock-market declines at home and stubbornly high US unemployment near 10%. "If events in Europe evolve so that they have a more severe and broad impact on financial markets, then the scope of the problems for the U.S. could be magnified,'' said Charles Evans, president of the Federal Reserve Bank of Chicago.
Irwin Kellner at MarketWatch says falling retail sales means a second recession is back on the table. "Lower- and middle-income families are worried about jobs, their mortgage, and the rising cost of food and health care. The rich are less worried about jobs, but they have taken a beating in the stock market, second homes, art and other investments. There's less eating out than there used to be. The only restaurants that seem to be doing well are fast-food stores and new, trendy upscale establishments. Since retail sales make up over half of all consumer spending, it is safe to say that at least one-third of the gross domestic product is now falling. It is also not a stretch to conclude that the rest of consumer spending, which is services, is soft as well. Add to this the ongoing weakness in housing sales and new home construction, the slowing in exports as the dollar rises in world financial markets and the sharp cutbacks by states and local government, and most of the economy — except for inventories — appears to have stopped growing and may well be contracting.
" In plain English, double-dip is back on the table."
no comment untill now