Home | Business News | Browse by Publication | M | Metal Center News

Economist Feldstein on the recession: 'there is a risk it could be very bad'.

Article Excerpt
"THE KEY QUESTION for me is not are we in a recession, but how long and how deep will it be?" economist Martin Feldstein told a gathering of steel industry executives last month in Scottsdale, Ariz.

Feldstein, professor of economics at Harvard University and president and CEO of the National Bureau of Economic Research, was a featured speaker at last month's annual meeting of Metals Service Center Institute and American Iron and Steel Institute members.

"Despite long-term structural problems like the fiscal situation, Medicare and Social Security, I think the U.S. economy is basically sound, strong and effective," Feldstein said. "Short-term, the situation in the U.S. economy today is bad and it's getting worse. There is a risk it could be very bad."

Rising unemployment and the increasing cost of food and energy have led to reductions in personal disposable income. Household wealth has declined because of declines in the stock market and, more importantly, because of the falloff in home values. Consumer sentiment was recently reported at a low not seen since 1982, dampening retail sales.

In the business sector, industrial production and new orders for manufactured goods are on the decline. Residential construction is down nearly 40 percent vs. a year ago.

Some expect a modest slowdown and that the economy will rebound this...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!