Stiglitz: US Economy May Contract in the Second Half of Next Year

Nobel-laureate economist Joseph Stiglitz warns that there’s a “significant” chance the U.S. economy will recede in the second half of 2010, and urged Washington to prepare a second stimulus package to spur job creation.

AP: “The likelihood of this slowdown is very, very high,” Stiglitz told reporters in Singapore. “There is a significant chance that the number will be in the negative range.”

“If you don’t prepare now, and the economy turns out to be as weak as I think it’s likely to be, then you’ll be in a very difficult position,” he said.

The U.S. economy expanded at an annual rate of 2.8% in the quarter that ended in September, less than the government’s 3.5% reported in October, after a record four straight quarters of contraction. For most people however, the recovery will not feel real until the jobs and the housing market improves. The unemployment rate fell to 10% in November from 10.2%in October.

Jobs may still be hard to find well into 2010 as businesses remain reluctant to hire, economists say.

2 Comments on Stiglitz: US Economy May Contract in the Second Half of Next Year

  1. GDP was revised again to 2.2%, it’s not 2.8% ending September. Why does it seem journalists are always getting the facts wrong? I guess it’s like everything else, “…majority of fortune 500 companies with positive earnings…” NOT! LOOK AT THE NUMBERS PEOPLE! THE FACTS!!! They beat pathetic expectations, but actual earnings have continues to drop since this whole collapse began in 2008! The propaganda out there is nuts.

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