Wednesday August 12, 2009 21:50
Federal Reserve says worst of recession is over
In a statement, the Federal Reserve suggested that the recession might have . While “economic activity is likely to remain weak for a time”, it has started to “level off”. This statement was made in light of its decision to maintain US interest rates at between 0% and 0.25%. The Fed said that the low rates will continue to hold to aid the recovery.
Analysts have been saying that a recovery has been very likely given indicators such as the stock market’s rally and the rebound of certain markets. The only factor that prevented an optimistic claim was the still- widespread unemployment. However, after the latest jobs data proved to be better than expected, analysts are starting to jump into the optimists’ bandwagon.
Consumer spending has also risen in June for the second consecutive month while productivity jumped in the second quarter showing that workers are willing to produce more for less pay. Exports are also up by 2% to signify that manufacturing is also on the rise.
“It is not all that surprising, it acknowledges a lot of what we have been seeing, that conditions are stabilising and the recession may be ending,” said Mark Vitner, an economist at Wells Fargo.
Source: BBC
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