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

September 21, 2012 by Jon C. Ogg

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

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here
you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.


Click here
to match with up to 3 financial pros who would be excited to help you make financial decisions.