U.S. Economy In Free-Fall
As the American people feast on their Thanksgiving turkeys, there will be little to cheer about this holiday as the global economy in general, and the U.S. economy in particular, descend into the abyss. The latest economic data portents to a dismal future, with consumption spending plummeting, along with the continued and accelerating collapse of new homes sales to record lows amid falling consumer confidence. The unemployment rate is rising rapidly, one manifestation being the high initial claims for unemployment benefits. Simultaneously with all the other bad news, orders for durable goods such as cars, home appliances and factory equipment continues to fall through the floor.
Though the current economic news seems dismal enough, it is clear to many economists that the worst is yet to come. The global macro-economic data that will be forthcoming will define a staggering global economic recession that will defy policy prescriptions being enacted by panicky governments.
On January 20th, 2009, Barack Obama will be inaugurated as the 44th President of the United States. When Obama takes office, he will likely inherit from George W. Bush an enfeebled economy that is contracting at a rate in excess of 5%. The fourth quarter GDP data will certainly make dismal reading, as it will undoubtedly chronicle an economy that is in free-fall.