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Economy About to Get a Lot Bleaker
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The Associated Press REPORTS HERE that "the government is about to confirm what many people have felt for some time: The economy barely has a pulse. The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent.

That's a sharp slowdown from the first quarter, when the economy grew at a 3.7 percent annual rate, and economists say it's a taste of the weakness to come. The current quarter isn't expected to be much better, with many economists forecasting growth of only 1.7 percent."

"Such slow growth won't feel much like an economic recovery and won't lead to much hiring. The unemployment rate, now at 9.5 percent, could even rise by the end of the year. 'The economy is going to limp along for the next few months, said Gus Faucher, an economist at Moody's Analytics. There's even a one in three chance it could slip back into recession, he said."

"...the impact of the government's $862 billion fiscal stimulus program is lessening.

That leaves the private sector to pick up the slack. But businesses are cutting back on their spending on machines, computers and software....And the housing sector is slumping again after a popular home buyer's tax credit expired in April."

"Consumers can't be sure their jobs are safe, with unemployment so high. Business executives don't know if sales and profits will grow enough to justify adding jobs. And potential changes to tax laws at the end of this year and other policy reforms also make it hard to plan ahead, economists say. 'People have been overwhelmed by uncertainty,' said Ethan Harris, an economist at Bank of America Merrill Lynch."

"High unemployment is making it harder for people to make their mortgage payments and stay in their homes.  About 9.9 percent of homeowners had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association said Thursday. That number, adjusted for seasonal factors, was close to a record high of more than 10 percent at the end of April."
 
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