Both the US and UK are both showing signs of slower decline, which is very positive news. The downside is that growth or signs of new life are difficult. A new report came out today from a British business lobby (CBI) that shows the British economic fall was more severe than previously thought though the rate of decline is slowing. This appears to be very similar to what we are seeing in the US as well. Until the economy settles and manages to avoid new surprises (hello, banks) growth is going to be hard. For some time now, many economists have suggested the economy will not experience a "V" (sharp drop, sharp increase) but rather "L" shaped growth. This means a hard drop and then very slow growth over an extended period of time.
The economy is still in decline but results from a new economic survey show evidence the recession is abating as more companies see rising demand for their products, taper plans for job cuts and report profit margins on the uptick.And the other possible option is a "W" shaped recession that experiences a few sharp declines. With looming banking issues out there, we could always see improvements and then hit another bottom due to a surprise.
The latest quarterly survey by the National Association for Business Economics, set to be released Monday, indicates that the economy is at an inflection point, but not quite a turning point, said Sara Johnson, NABE’s lead analyst on the survey and an economist at IHS Global Insight.
