US Economic Condition Better in the Second Quarter
The whole nation and the entire world can now hope that the US economy will ease a bit and that the worst after the Great Depression might be finally over as the economy fell by only 1 per cent in the second quarter.
This came as a great relief especially after the US GDP was crumbling at a rate of 6.
4 per cent at the beginning of the year.
GDP is the measure of services and goods produced as part of a nation's economy, the largest element being consumer spending.
The slowing of the contraction is largely owed to Government packages which includes $787 billion stimulus package which accounted for 20 per cent of the nation's production.
However, the main component of GDP, consumer spending has dropped significantly with Americans becoming more cautious and saving more and spending less.
They are worried about losing their jobs and weakening household finances.
The report released by the Commerce department indicates that imports have decreased and so has business spending.
Business spending which decreased by 39.
2 per cent in the first quarter improved in the second quarter and dropped by only 8/9 per cent.
The Obama government and the Democrats could be in a hitch if the economy becomes largely dependent on the government.
Economists feel that the recovery pf the US economy could be very slow and could even last for years and not just months.
In fact the report also confirms the fact that the recession is deeper than what it was initially thought it to be and is in deed the longest after the Great Depression lasting for more than 18 months now.
Mark Zandy of Moody's Economy said that finally the country is moving to recovery from recession its indicators being corporate profits, boost in the stock market and housing markets along with a slow pace of job losses.
The local and state governments also increased their spending at 2.
4 per cent since the second quarter of 2007.
However, the number of unemployed people will not decrease for some time now as employers are sceptical about recruiting new faces till its business strengthens and with almost 15 million people without a job the government has already started feeling the pressure to speed up the recovery process.
The government however has started celebrating the recovery in the second quarter and banking on its success, President Obama lobbied for an extension of the "cash-for-clunkers" subsidy prompting an increase of car sales this week.
Americans usually do not believe that their economy is actually improving till they get a proof of job creation.
Consumers have saved more than 5 per cent of their disposable income which is in quite contrast of their free-spending behaviour during the housing boom.
Disposable income is the income left after tax deduction available for saving and spending.
US Commerce Secretary Gary Locke assured the people that the result of the second quarter does show that real progress has been made towards easing the economy.
President Obama also reassured that there are no more fears of another Great Depression.
This came as a great relief especially after the US GDP was crumbling at a rate of 6.
4 per cent at the beginning of the year.
GDP is the measure of services and goods produced as part of a nation's economy, the largest element being consumer spending.
The slowing of the contraction is largely owed to Government packages which includes $787 billion stimulus package which accounted for 20 per cent of the nation's production.
However, the main component of GDP, consumer spending has dropped significantly with Americans becoming more cautious and saving more and spending less.
They are worried about losing their jobs and weakening household finances.
The report released by the Commerce department indicates that imports have decreased and so has business spending.
Business spending which decreased by 39.
2 per cent in the first quarter improved in the second quarter and dropped by only 8/9 per cent.
The Obama government and the Democrats could be in a hitch if the economy becomes largely dependent on the government.
Economists feel that the recovery pf the US economy could be very slow and could even last for years and not just months.
In fact the report also confirms the fact that the recession is deeper than what it was initially thought it to be and is in deed the longest after the Great Depression lasting for more than 18 months now.
Mark Zandy of Moody's Economy said that finally the country is moving to recovery from recession its indicators being corporate profits, boost in the stock market and housing markets along with a slow pace of job losses.
The local and state governments also increased their spending at 2.
4 per cent since the second quarter of 2007.
However, the number of unemployed people will not decrease for some time now as employers are sceptical about recruiting new faces till its business strengthens and with almost 15 million people without a job the government has already started feeling the pressure to speed up the recovery process.
The government however has started celebrating the recovery in the second quarter and banking on its success, President Obama lobbied for an extension of the "cash-for-clunkers" subsidy prompting an increase of car sales this week.
Americans usually do not believe that their economy is actually improving till they get a proof of job creation.
Consumers have saved more than 5 per cent of their disposable income which is in quite contrast of their free-spending behaviour during the housing boom.
Disposable income is the income left after tax deduction available for saving and spending.
US Commerce Secretary Gary Locke assured the people that the result of the second quarter does show that real progress has been made towards easing the economy.
President Obama also reassured that there are no more fears of another Great Depression.