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Economics
StraightTalk®

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Bart van Ark
Chief Economist

June 2009
Slow Growth in the Consumer Sector Is Holding Back Overall Recovery

As signs of a turnaround become more and more evident in the United States and Europe, the big question has become whether we are getting out of the woods more quickly than many are suggesting. Unfortunately, a rapid recovery is unlikely. Even though The Conference Board Consumer Confidence IndexTM has recently bounced back, constraints in income, wealth, and access to credit rule out a rapid increase in consumption. The rapid increase in U.S. savings is mainly the result of consumers paying off debt. It remains to be seen whether this trend represents a structural shift, but consumers will be watching their budgets carefully for a significant time to come.

 

StraightTalk is a monthly publication from the Chief Economist of The Conference Board. It provides economic research, objective analysis, and forecasts to help new economy business executives assess economic conditions impacting their markets.

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Updated: June 10, 2009
Percentage change, seasonally adjusted annual rates

2009

2010

2008

2009

2010

I Q*

II Q

III Q

IV Q

I Q

II Q

Annual

Annual

Annual

Real GDP

-5.7

-2.4

0.4

1.6

2.1

2.1

1.2

-2.8

1.6

Real Consumer Spending

1.5

-0.4

1.6

1.4

1.3

2.4

0.3

-0.7

1.7

Housing Starts mil. Units

0.52

0.49

0.51

0.54

0.56

0.58

0.90

0.52

0.64

Real Capital Spending

-36.9

-22.3

-13.4

-6.6

3.1

4.4

1.6

-20.6

-1.0

Net Exports Bil. '00$

-302.6

-313.4

-316.6

-342.1

-359.7

-369.0

-390.2

-318.7

-367.2


* Actual data


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