Consumers, companies flash recession warnings
The warning signs of a U.S. recession flashed again on Friday as consumer sentiment sank to its lowest in 26 years and corporate earnings appeared set for their third consecutive quarter of contraction.
The dour data and grim outlook for companies could present a dilemma for the Federal Reserve, which is seen as eager to wind down its campaign of aggressive interest rate cuts even though the economy is still struggling.
The Reuters/University of Michigan Surveys of Consumers index of confidence for April fell to 62.6 from 69.5 in March, sliding deeper into recessionary territory and coming in worse than economists had expected.
It was the worst reading since March 1982, when the “stagflationary” period of low growth and high inflation was still an issue for many Americans.
“Consumer confidence continues to tank,” said Kevin Flanagan, fixed-income strategist in the global wealth management unit at Morgan Stanley in Purchase, New York.
President George W payday loans in 1 hour. Bush acknowledged that the U.S. economy was in a “slowdown” but said tax rebates that will start hitting consumers’ bank accounts next week should help.
“The money’s going to help Americans offset the high prices we’re seeing at the gas pump and the grocery store and it will also give our economy a boost to help us pull out of this economic slowdown,” Bush said.
The government has accelerated its schedule for distributing the rebate payments under a $152 billion economic stimulus package.