U.S. growth to recover in H2 2008
Written on February 11, 2008
U.S. growth, hurt by a sharp housing market downturn, should pick up in the second half of 2008 driven by a stimulus package and the resilience of the economy, U.S. Commerce Secretary Carlos Gutierrez said on Monday.
But Gutierrez said the impact of the housing crisis, which took a heavy toll on growth in the latter part of 2007, could last “a couple of quarters” before recovery “to a growth rate more akin to what we have been having over the last several years”.
“In the first half of the year we will see a lower growth rate … but our growth should pick up in the second half of 2008,” Gutierrez told Reuters in Amman.
Gutierrez said the economy, which grew last year at 2.2 percent, the slowest pace in five years, would continue to grow despite the downturn.
“While we go through this correction we will see a slower rate of GDP growth but we will continue to see GDP growth .. creditreports. our economy is strong. We will get through this correction the way we got through many others,” he said.
U.S. growth slackened to a 0.6 percent annualized pace in the final three months of the year and many economists fear the country is being dragged into a recession by the slumping housing market, that has sparked a global credit crunch.
Gutierrez said a government stimulus package of over $150 billion approved by Congress was designed to “be temporary, quick and impactful to keep the economy moving while we go through this housing correction”.
Less affected segments of the economy would ease the impact of the crisis in the housing sector on growth.
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