The United States economy still stagnant

Previously, it was forecasted by the Ministry that within the second quarter in 2012, GDP of the United States would increase by 1.7%, which is lower than the 2% of the 1^st quarter. Experts said the stagnant economy of the U.S was due to low goods consumption and decreasing fixed investment. To cope with the downturn trend, the U.S Federal reserve system (FED) was forced to pour out the 3^rd stimulus package for the economy and at the same time lower the expected growth rate for the year previously set at 1.9% -2.0% to 1.7%-2.0%.

On the same day, the U.S Ministry of Labor also released statistics showing that applications for unemployment allowances have reduced by 26.000 to 359.000 sets until September 22^nd. It was estimated before by economists that this number would reach 379.000 since many businesses were laying-off. This could temporarily be taken as a positive sign in the currently difficult situation of U.S labor market when the unemployment rate stopped at 8% in October last year.

Previously on September 13^th, FED decided to apply new methods in order to stimulate the stagnant economy of the U.S, accordingly, it would buy 40 billion dollars’ worth of stock every month. Deadline for these transactions has not been determined, FED also said if the economy “did not considerably recover”, the banks would have to buy more mortgage securities and other assets, at the same time “apply additional polices” to stimulate the U.S economy. In addition, FED said it would extend the schedule to maintain interest rate at nearly 0% from end of 2014 to 2015 at earliest.

The U.S central bank had bought more than 2.000 billion dollars’ worth of U.S bonds and mortgage securities since the financial crisis 2007-2009, but U.S economy had witnessed no significant recovery.

 Source: Vietnam Government Portal