GDP shrinks at a smaller-than-expected pace.
This week, I have chosen for a bit more positive article about the economy. In this article it is about the slow recovery of the economy.
In the spring, the recession was disappearing slowly. People believe that the economy is growing again because the economic activity shrinks at a lower rapidity than the economists had predicted and then the previous quarters.
The most important reason for this is that companies didn’t cut back their spending on equipment and software this much as expected. A second reason is that consumers also didn’t cut back their spending so much.
President Barack Obama has also given the economy a financial stimulant of 787 billion dollars. Because of that stimulant, the auto sales increased again. People can get more reduction if they buy a more eco friendly car.
Despite this good news, analysts are warning that the recession and his consequences are still not over. Especially, the consequences are not to be underestimated and people will still feel the effects of this crisis a while.
Certainly the people who has lost their jobs because of this and the credits who are hard to get these times could cause a shrinkage of the spending.
All in all, there is a recovery and this is expected to persist the coming months but at a slower tempo.
I also think that the consequences of this recession will still be touchable a while but when people show a good attitude and don’t sit at the address everything is gone be solved in time.
There is off course a need after enough financial support of the government. The government should invest more in companies so that they can offer new jobs and they have to encourage people with subsidies to start new businesses so that they can make new jobs. There should also be a better and more specific control system for the banks so that this won’t happen again.
You can read the article on: http://www.nydailynews.com/money/personal_finance/2009/09/30/2009-09-30_economy_is_looking_up_sort_of_gdp_shrinks_at_a_smallerthanexpected_pace.html
greet,
Livine
Abonneren op:
Reacties posten (Atom)
Hi Livine!
BeantwoordenVerwijderenFirst of all, it was good to read an article that had somewhat of a positive note after all the bad news we already read and heard since this crisis started.
I want to react to something I read somewhere in the beginning of your text. In the article, they say that the economy is recovering of the crisis at a faster paste than they had expected. A reason that they give is that companies haven’t cut back as much on equipment and software as was expected. I totally agree with this. I don’t really know how different their spending was to other years, but I do think it is very important that when there is a crisis, companies, as well as customers, keep on spending. Otherwise, they only create a self – fulfilling effect. It’s this way with inflation, with price - increases in supermarkets, etc. People always make the mistake of running away from the economy when it doesn’t go like it should go and so they only enlarge the effect.
I am not saying that we don’t have to watch what we are spending at the moment, because we certainly do. This is not the best economic climate to go overboard with our expenses, but I am just saying that this crisis can’t hold us back from spending; not as a customer, not as a company, not as a government.
Really good article!
Lien Vanneder
It is nice that you review an article with some positive news about the economy. I think it is important that there are signs of economic recovery. All in all, when people here nothing but bad news they are inclined to cut spending and postpone loans. In this way, a vicious circle starts with an economic crisis that has a negative effect on the consumer behaviour that in turn has a negative impact on the economy. Therefore, I think it is also important that the government helps to stimulate the economy in times of crisis. That is why I think it is a good thing that Barak Obama has given a stimulus to the economy of 787 billion dollars, as you mention in your article.
BeantwoordenVerwijderenGreet Annelies