Free Listening English lessons

Recession Easing, but Many Americans Still Afraid to Spend

December 21st, 2009 at 03:47am Under Economy Report

This is the VOA Special English Economics Report.

Stock prices took a roller-coaster ride this week — down one day, up the next. Experts say the situation is likely to continue until investors feel more sure about signs of economic recovery.

Some investors worry that Americans are not doing enough to lift the world’s largest economy out of recession. This is back-to-school season. But the National Retail Federation says school-related sales are down from last year.

MOTHER: “I don’t want to spend more than twenty dollars for a backpack.”

Sale signs on a store window in Santa Monica, California

Consumer spending is seventy percent of the economic activity in the United States. But consumer confidence — a measure of trust in the economy — fell unexpectedly this month. A lot of people feel uneasy about spending after the longest recession since World War Two.

WOMAN: “My situation is fine, but I am still aware that I could lose my job at anytime, and there’s still no definite security. That’s why I am paying attention more.”

Jobs have continued to disappear, though at slower rates. Record numbers of Americans are in danger of losing their homes. And the days of easy credit are gone. The Treasury Department says lending fell for a fifth month at banks that received government aid.

Still, some economists say other signs in the economy show that the recession is over already, or will be soon. Then the question is: how fast or how slow will the recovery be?

The recession may also be ending in Japan. Japan has the world’s second largest economy. Officials reported this week that the gross domestic product grew nine-tenths of one percent between April and June. It was the first growth in Japan’s economy in fifteen months.

But there are concerns that Japan and the United States could face a “double-dip” recession. That is a period of growth followed by another downturn. Japan will hold national elections on August thirtieth. Public opinion surveys show the main opposition party in the lead.

In Europe, reports last week showed a year of recession easing in Germany, its largest economy, and in France. Both countries had growth of three-tenths of one percent between April and June. That news raised hopes for an early recovery among the sixteen countries  that use the euro.

Still, the chief economist of the International Monetary Fund says the effects of the world economic crisis will hurt both supply and demand for years to come. Olivier Blanchard says even after recovery, the global economy may not produce as much as it did before.

And that’s the VOA Special English Economics Report. For the latest news, and for transcripts and podcasts of our reports, go to voaspecialenglish.com. I’m Steve Ember.

By admin Add comment

So Where Are the Jobs?

December 1st, 2009 at 12:16pm Under Education report

This is the VOA Special English Economics Report.

America’s economy has started to grow again. Now what about jobs?

The government says productivity jumped in July, August and September. That meant companies produced more with fewer workers. Also, new claims for unemployment aid fell last week to the lowest number since January.

People waiting in line at a job fair in Livonia, Michigan

But eight million jobs have disappeared since the recession began in December of two thousand seven.

Jack Strauss at Saint Louis University in Missouri says recent recoveries have been slow to create jobs.

JACK STRAUSS: “Historically, during our last two recessions in ninety-one and two thousand one it’s taken twenty-three months in ninety-one and about thirty-six months, three years, in our last recession in two thousand one for the United States to regain the jobs lost in the recession.”

Experts debate the reason for these so-called jobless recoveries. But Professor Strauss says a banking crisis is especially hard to recover from, because there is less money to lend to support growth. Banks have been holding bigger safety reserves.

On Wednesday, the Federal Reserve kept its target rate near zero for overnight loans between banks. The central bank said levels are likely to remain “exceptionally low … for an extended period.”

Low interest rates and growing federal deficits have weakened the dollar. But that also lowers the price of American exports, which could help drive job creation. Yet where exactly will future jobs come from?

Investor Warren Buffet says America’s “future prosperity” depends on its rail system. On Tuesday his Berkshire Hathaway company agreed to buy the nation’s second-largest railroad, the Burlington Northern Santa Fe. The forty-four billion dollar deal is Berkshire’s biggest ever.

The Obama administration is also putting money into transportation to speed recovery. A program that paid Americans to buy new vehicles with higher fuel economy lifted sales for automakers. Ford just reported a profit of almost a billion dollars for July through September.

A second government program — a tax credit for first-time home buyers — has helped the housing market. These two programs fueled a lot of the recent economic growth.

But economist Jack Strauss says credit conditions threaten the main engine of job growth since two thousand one — small businesses.

This week, CIT, a lender to small and medium sized businesses, sought bankruptcy protection from its creditors so it can reorganize. Taxpayers will likely lose more than two billion dollars in federal rescue money.

And that’s the VOA Special English Economics Report, available online at voaspecialenglish.com. I’m Mario Ritter.

By admin Add comment