The US economy has weathered its worst days over the last two years and, following Asia, will come alive later in Y 2010.
The overall outlook here at EH for the US economy in Y 2010, is for slow, modest and sustained growth with a target of 2.7 to 2.9 % this year.

The limiting factors: the consumer is still over-burdened, corporate balance sheets are still in the process of getting healthier, and there remains the uncertain regulatory and fiscal environment that always makes business cautious in taking on risk and making investments.

US core inflation is expected to decelerate this year in the face of a very wide output gap, and in Y 2011, there will be a modest acceleration in core inflation, but fear remains that inflation may be the only escape from the debt problems.

EH believes that the US Federal Reserve will begin tightening monetary policy later this year or early in Y 2011 that will lift the Fed funds rate to 1.00 during the period.

The US unemployment rate stood at 9.7% as of the end of February as employers shed fewer jobs than expected, according to official statistics, indicating that worse is past and the job market will soon begin to improve. Remember the job market is a lagging indicator and 100% employment is gagged at about 4.7% unemployment in the USA. —Paul A. Ebeling, Jnr. www.livetradingnews.com

Posted by Shayne Heffernan on Mar 14th, 2010and filed underLatest News, USA.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site