Just last week, Chairman Ben S. Bernanke appeared before the Joint Economic Committee of the US Congress to offer his views on recent economic developments along with the outlook for the economy and current conditions in financial markets.
It’s no surprise that the gross domestic product (GDP) dropped 6% in the 4th quarter of 2008, continuing in the 1st quarter of this year. Along with this cut was the loss of some 5 million payroll jobs. Ongoing claims for unemployment forecast probable further unemployment in coming months.
The somewhat good news is that the declining housing market has shown some signs of bottoming with existing home sales being fairly stable since late last year. Sales of new homes have firmed a bit. Unfortunately, indicators of business investments remain weak.
Sadly, commercial real estate conditions are poor. Vacancy rates are rising and prices for these properties, falling. Credit in this sector is still extremely strained.
To read the entire presentation of Chairman Bernanke’s Outlook, see http://www.federalreserve.gov/newsevents/testimony/bernanke20090505a.htm
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