Blog: Dean BestUS economy - a new Great Depression?

Dean Best | 25 April 2008

A couple of interesting studies were out this week that shed some light on what is or what isn’t going on in the US economy at the moment.

The extent and depth of the current economic crisis is being debated ad infinitum.

Is this the beginning of the darkest economic cloud to descend on the Western economies since the Great Depression, or is it merely the correction of a market that had gotten over hyped and over heated?

Well, the opinions of those desperately trying to juggle the numbers in the face of the storm have taken a turn for the worst, a survey suggests.

A US survey of CFOs and senior comptrollers conducted by Grant Thornton found that 59% believe that the US economy will worsen over the next six months, while 39% believe it will improve or remain the same. This represents a significant change in outlook since the same survey was last taken only six months ago, when 36% felt the economy would worsen and 64% believed it would improve or remain the same.

That said another set of figures this week, gave some credence to the argument that we are talking ourselves into a worse situation than we actually need to. All the doom and gloom prophesised by the media becomes self-fulfilling, when the bare facts of the matter suggest the outlook isn’t nearly as bad as doom mongers would have us believe.

The figures are highlighted on our sister site just-style in an article examining the extent the credit crunch has hit retail sales in the US and Europe.

The EU's official statistics agency Eurostat shows retail sales in euro-zone clothing stores were 3.2% higher in January this year than last.

The US Department of Commerce shows US clothing store sales were 2.3% higher this February than last - and the UK's Office for National Statistics shows its clothing sales an extraordinary 4.9% higher in February than last year too.

As our correspondent says: “Do these public servants count differently from the retailers? Well, slightly, but whatever's going on in major clothing retailers, it's certainly not melt-down.”


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