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U.S. signals hope for economic recovery |
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16:25, September 04, 2009 |
There have been quite a few symptoms for a positive economic growth trend in the United States lately: Financial markets have turned stable gradually; the market confidence begins to build up; the credit resumes; treasury bond market has picked up again, and the economy rebounds. The U.S. economy needs time for readjustment and there are still risks and uncertainty involved.
U.S. economy is able to rebound as along as the property market resuscitates (which has undergone 14 consecutive quarters of decline) and the financial market has resumed stability, and the above two conditions are now available. In addition, the U.S. auto market begins to go up and enterprise inventory adjustment has basically been completed.
All this shows the basic aspects of U.S. economy have improved indeed and the peripheral economic situation is "better than anticipated". If the government quits the market in an orderly way, the resurgence and recovery of U.S. economy can be sustainable.
In view of this situation, U.S. economy will bottom out earlier than European and Japanese economies as the U.S. economy has more positive factors; the global capital has flown into the United States at an accelerated speed and the dominant position of the U.S. dollar has not qualitatively changed; the U.S. is still superior to other nations in term of institutional setup, science and technology, qualified personnel and market advantages; and the Obama administration's policies are more advantageous than those of the European Union (EU).
U.S. economy, which has merely halted a decline, could recover in the second half of the year, and its recession has been the worst one in the post-war era. The U.S. market will start a genuine recovery in 2010, and the time is needed to return to the potential growth area.
The U.S. has, after all, experienced a recession, which is not typical but full of great uncertainly. The financial market stays stable at the moment, the "de-lever" process has not ended, and toxic assets have been far from being solved.
Trimming down the debt is rather a difficult and arduous job, and there are multiple obstructions and resistances to adjustments and incremental innovations. Hence, positive signs emerging at present do not indicate that the banking industry is now able to perform with flying colors, and that the structural reform will require a very long period of time to finish.
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