Recent reports from Reuters have noted that US economic conditions are not exactly in good stead. This is worst depreciation of US economy after 1982 as per financial reports of fourth quarter of 2008 fiscal.
Much of present economic conditions of US could be blamed on exports that have been falling steadily. In US consumers have restricted their expenditures. Both these factors have played a significant role in sordid economic conditions in US.
According to latest information on economic conditions at US national economy depreciated at a rate of 6.2 percent for 2008 fiscal. During January 2009 it had been calculated by Commerce Department that in final quarter of 2008 economy of US depreciated at a rate of 3.8 percent.
As far as economic conditions for US are concerned present state of affairs would be continuing in first half of 2009 fiscal as well. However, economic experts have also reiterated that they expected such conditions beforehand and thus these results were not as shocking as they would be otherwise.
In latest information on economic conditions in America it has been seen that stock markets in US have been hit hard by global economic downturn. This has been indicated by its various stock indices like Dow Jones Industrial Average for example that have declined at an alarmingly sharp rate.
US economic conditions have been affected further by declining levels of consumer expenditures. As per estimates of Commerce Department in fourth quarter of 2008 fiscal consumer expenditures went down by 4.3 percent. This decline also had an adverse effect on gross domestic product of USA. In January 2009 rate of depreciation in consumer expenditures was 3.5 percent.
Problems in US economic conditions have been compounded by fall in exports that are major sources of revenue for US. In 2008 exports of US went down at a rate of 23.6 percent. In economic reports for 2008 it had been estimated that exports in USA had gone down by 19.7 percent.
Losses to tune of $19.9 billion had been made in inventories section in US. Investments in business sector of American economy have gone down by 21.1 percent in 2008 fiscal to add to problems of present US economic conditions.
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The US dollar is consolidating, largely within yesterday's ranges. Month-end and quarter-end hedge and portfolio adjustments are notoriously difficult to predict. There is also large option expires today. Given the EU Summit this weekend, a holiday in the US on Monday, and no fewer than five central bank meetings among the high-income countries next week, the broad consolidative, even in choppy, tone is likely to carry into the weekend.
Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. IMF’s Chief Economist from September 2003 to January 2007. Inaugural recipient of the Fischer Black Prize.
Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum
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