Thursday, September 04, 2008 1:18:54 PM
Eric the Fed: Jobless rate may hit 6 percent
No upturn in sight
By Jay Fitzgerald
Thursday, September 4, 2008
Boston Herald General Economics Reporter
http://www.bostonherald.com/business/general/view.bg?articleid=1116877
Jay Fitzgerald has been a journalist and blogger for years. He's now the general economics reporter for the Boston Herald.
The nation’s economy isn’t out of the woods yet, Federal Reserve Bank of Boston president Eric Rosengren warned yesterday.
Despite unexpected economic growth in the second quarter, the U.S. economy is still hobbled by a credit crunch as severe as the one seen in the early 1990s, which could cause the jobless rate to rise above 6 percent in coming months, Rosengren said yesterday.
Recent Fed action and tax rebates helped prevent an even worse situation, Rosengren said in a speech yesterday before the Greater Manchester Chamber of Commerce in New Hampshire.
But the financial system’s woes, caused by the recent subprime-mortgage meltdown, are now spreading into other financial sectors, reducing loans to businesses and consumers, he said.
Prime, home-equity and construction loans are all feeling the credit crunch, Rosengren said.
“The tightening (of lending) already appears to be more widespread than it was during the early 1990s,” when the economy was reeling from a recession, Rosengren said.
Rosengren, who once thought the economy would emerge from the current turmoil in early fall, now believes the nation’s financial system won’t recover until the end of the year.
The nation’s jobless rate, now at 5.7 percent, could rise above 6 percent, for a net loss of two million jobs since a year ago, he said.
Rosengren’s speech came soon after the European Union announced that its 15-nation members collectively experienced a 0.2 percent contraction in their economies, indicating that global economic growth was slowing.
The U.S. economy grew by nearly 2 percent in the second quarter, surprising many economists.
But Rosengren said yesterday that probably won’t repeat itself in the second half of the year.
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No upturn in sight
By Jay Fitzgerald
Thursday, September 4, 2008
Boston Herald General Economics Reporter
http://www.bostonherald.com/business/general/view.bg?articleid=1116877
Jay Fitzgerald has been a journalist and blogger for years. He's now the general economics reporter for the Boston Herald.
The nation’s economy isn’t out of the woods yet, Federal Reserve Bank of Boston president Eric Rosengren warned yesterday.
Despite unexpected economic growth in the second quarter, the U.S. economy is still hobbled by a credit crunch as severe as the one seen in the early 1990s, which could cause the jobless rate to rise above 6 percent in coming months, Rosengren said yesterday.
Recent Fed action and tax rebates helped prevent an even worse situation, Rosengren said in a speech yesterday before the Greater Manchester Chamber of Commerce in New Hampshire.
But the financial system’s woes, caused by the recent subprime-mortgage meltdown, are now spreading into other financial sectors, reducing loans to businesses and consumers, he said.
Prime, home-equity and construction loans are all feeling the credit crunch, Rosengren said.
“The tightening (of lending) already appears to be more widespread than it was during the early 1990s,” when the economy was reeling from a recession, Rosengren said.
Rosengren, who once thought the economy would emerge from the current turmoil in early fall, now believes the nation’s financial system won’t recover until the end of the year.
The nation’s jobless rate, now at 5.7 percent, could rise above 6 percent, for a net loss of two million jobs since a year ago, he said.
Rosengren’s speech came soon after the European Union announced that its 15-nation members collectively experienced a 0.2 percent contraction in their economies, indicating that global economic growth was slowing.
The U.S. economy grew by nearly 2 percent in the second quarter, surprising many economists.
But Rosengren said yesterday that probably won’t repeat itself in the second half of the year.
PEAK OIL #board-6609
PEAK OIL - SUSTAINABLE LIVING #board-9881
PEAK WATER #board-12656
Solar #board-11148
Grass Roots #board-9037
PEAK OIL #board-6609
PEAK OIL - SUSTAINABLE LIVING #board-9881
PEAK NATURAL RESOURCES #board-12910
PEAK WATER #board-12656
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