Housing, Credit Crunch, Oil Prices Spur Economic Jitters
_Click here: Online NewsHour: Analysis | Economists Explain Market Turmoil |
October 16, 2007 | PBS_ (http://www.pbs.org/newshour/bb/business/july-dec07/
jitters_10-16.html)
Ecerpts:
Treasury Secretary Henry Paulson delivered a somber assessment of the
U.S. economy Tuesday, calling the housing and credit crunch "the most
significant current risk" to the economy. Financial experts look at the
factors
affecting the nation's economic health, including sky-high oil prices.
ROBERT SHILLER, Yale University: Well, I am among the more bearish
economists, and this is something that I have been warning about for some time
now.
DAVID HALE, Chairman, Hale Advisers: The reality is the U.S. economy is
muddling along. Our growth rate, year on year for the second quarter, is 1.9
percent. But if you take away the housing sector, the growth rate is 2.9
percent.
We have clearly a major downturn in housing. In the year ahead, 2 million
Americans could lose their homes to foreclosures, so this is an economic and
social problem.
But the reality is, we have modest gains in capital spending. The consumer is
still spending. And we're having an extraordinary export boom, because we
have currently the strongest world economy in 1,000 years. Indeed, U.S. export
growth is running at 13 percent, 14 percent, which is providing support for
our manufacturing industry.
So the jury is still out whether we'll actually have a recession. We won't
know, I think, for four or five more months.
(Further comments regarding recession, public confidence, industrial
production, and the Federal Reserve's next step.)
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