The Economy Obama Gets
Congratulations, President-elect Obama. Here's the economy you inherit:
--Your government is beginning perhaps its biggest run of borrowing since the war bond blitz during World War II. The government will sell $55 billion in bonds next week to raise money for its various bailouts, a number that is expected to reach $550 billion in new debt by the end of the year. But wait, there's more: The government expects to borrow an additional $368 billion in the first quarter of next year.
-- The October jobs report will be out Friday and economists expect a rise from 6.1 percent to at least 6.3 percent.
-- October consumer spending on items over $1,000 -- remember, consumer spending accounts for 70 percent of U.S. GDP -- fell off the cliff, according to MasterCard. More consumer spending data is out tomorrow, and it is expected to be equally gloomy.
-- Layoff figures show an economy in contraction, a trend that likely will continue through at least mid-2009, economists predict.
-- Third-quarter GDP was down 0.3 percent and economists predict fourth-quarter GDP will decline more, adding a formality to what most Americans already believe: The United States is in a recession. Two consecutive quarters of negative GDP growth indicate a recession.
-- Frank Ahrens
November 5, 2008; 10:55 AM ET
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