Chris Cantell Discusses Financials: U.S. facing a deep recession by Martina Janeckova

The U. S. has not experienced a deep recession in more than a quarter century- enough time for many people to forget what one feels like. Paul Ashworth, senior U. S. economist at Capital Economics in Toronto said that “In thinking about recessions, people will naturally think back to the last couple in the early 1990s and in 2001, but what they should be looking back at is further.” They should remember the 1970s recession, which was driven by oil crisis and lasted for a year and a half. Nearly 2.2 million people lost their jobs that time. In the 1980s the economy struggled with inflation and a transition from a manufacturing economy to one based on services and there was huge anxiety among Americans. The 1990s recession was connected with the preparations for the Gulf War, which increased the price of oil, but it lasted only 8 months. The last recession, linked to collapse of the tech stock bubble and terrorist attacks of 2001, lasted just 8 months. Economists think that current recession will be more severe than the last two ones. Paul Volcker, former Federal Reserve Chairman said “I think we almost inevitably face a considerable recession.” The Fed’s current chairman, Ben Bernanke delivered a more measured, but similarly grave assessment to economists, saying the recent financial turmoil “may well lengthen the period of weak economic performance and further increase the risks to growth.” Economists predict an increase in the number of people who lose their jobs. The jobless rate is currently at 6.1 percent and some analysts believe it could rise to 8 percent, which hasn’t happened since 1984.

by Martina Janeckova for PocketNews (http://pocketnews.tv)

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