Recession Watch: S&P Sees Slowing Growth Thru 2012 and 2013

Standard & Poor's is calling for lower growth in the second half for U.S. Gross Domestic Product. This may not be much of a surprise on the statement, but the expected drop is likely to continue in 2013 and the odds are now closer to the chance of a recession coming back.

S&P cites the disappointing jobs data in the report called "U.S. Economic Forecast: He's Buying A Stairway To Heaven." S&P now sees 2.2% total GDP growth in 2012 and only 1.8% growth in 2013. That means that S&P expects growth of only about 1.5% for the second half od 2012. S&P's expectation for the chances of another U.S. recession is about 20% to 25%, while chances of a quick turnaround are around 15%.

The most recent FOMC round of QE3 and a lengthening out to mid-2015 for incredibly low rates signals that a strong economic recovery is likely a long ways away. S*P showed that the monthly average is just 97,000 job gains over the past six months versus 240,000-plus each month last winter.

S&P does not expect a revival in household spending any time soon and the worries over the coming fiscal cliff is another issue.

The good news is about a housing recovery and residential investment is expected to contribute to GDP growth in 2012 for the first time in 7 years.

JON C. OGG


Filed under: 24/7 Wall St. Wire, Analyst Calls, Economy Tagged: featured
Read Full Story
  • DJI26559.54110.000.42%
    NASDAQ7998.061.980.02%
  • NIKKEI 22522200.56110.440.50%
    Hang Seng29963.26-161.42-0.54%
    DAX12222.3969.320.57%
  • USD (PER EUR)1.120.00110.10%
    USD (PER CHF)0.990.00150.15%
    JPY (PER USD)111.93-0.0480-0.04%
    GBP (PER USD)1.300.00080.06%