US Recession Possibly Slowing

By Michael Bowman

Washington
30 September 2009

A modestly upbeat reading of U.S. economic performance is adding to
hopes that the initial phase of a recovery could be underway.  

The U.S.
economy has been contracting for more than a year, and last quarter was
no exception.  An initial estimate of the April through June period
showed negative growth at a 1 percent annual rate, which was an
improvement over previous quarters that had seen drops as high as 5.4
percent.

Now, in its final calculation, the U.S. Commerce Department has
revised the second quarter figure to a more modest .7 percent
annualized dip in gross domestic product (GDP).

Economists welcomed the
news, saying it bolsters projections that a recovery might already have
begun. 

"GDP numbers were a little bit better than
expected.  Most of us [economists] thought there would be a slight
downward revision instead of a slight upward revision.  We are
expecting a pretty strong positive [growth] number for the third
quarter, not just in the U.S., but [also] around the world," said David Weiss, Chief Economist at the credit rating agency,
Standard and Poor's.

The upbeat sentiment was tempered, however, by a drop in a
regional U.S. economic indicator.  The Chicago Purchasing Managers
Index fell unexpectedly -- a sign of continued woes in U.S.
manufacturing.

Overall, many economists expect an eventual economic
recovery to be slow, with U.S. unemployment remaining high for months
to come.  The jobless rate stands at 9.7 percent and could edge higher,
even if the overall economy returns to positive growth.