Report: Weakness in U.S. economy shows no sign of easing
Industrial Distribution staff -- Industrial Distribution, 8/21/2008 7:56:00 AM
The ongoing weakness in the United States economy shows no signs of easing and could persist well into 2009, according to a report from the Manufacturers Alliance/MAPI.The group’s Quarterly Economic Forecast indicates that growth of the Gross Domestic Product will slow to 1.6 percent this year and further decline to 1.3 percent in 2009. That’s down from a previous MAPI forecast of 1.9 percent growth for next year in MAPI’s May report.
“The Internal Revenue Service accelerated the payment of tax rebates this year under the economic stimulus plan, getting cash in consumers’ hands earlier than expected,” chief Economist Daniel Meckstroth said. “[But] the cash windfall is only temporary and we expect a corresponding decline in spending in fourth quarter 2008 and into early 2009.”
Manufacturing production growth is also expected to slow, falling into negative territory in 2008, declining 0.5 percent after hitting 1.7 percent in 2007. It should increase to 1.6 percent in 2009, however, according to the report.
The MAPI’s previous quarterly forecast pegged production to grow by 0.4 percent in 2008 and by 3.1 percent next year.
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