Michael Panzner writes, "Let's Get Real"
With all of this going on in the world's other major economies —
China
"China Slowdown Spreading, HSBC Services PMI Shows" (Reuters)
China's services sector cooled in November to its weakest growth in three months, an HSBC purchasing managers' index showed on Monday, the latest data portraying an economy slowing quickly and in need of policy support.
The index fell to 52.5, a sharp decline given that October's reading was 54.1 — the highest in four months — though the index remains above the 50 level that separates expansion from contraction in the sector.
Expectations for new business dropped to their lowest level in three months too, but remained firmly above 50.
Japan
"Japan Recovery Paused as Deficit Grows" (Agence France-Presse)
TOKYO — The Bank of Japan said Wednesday the country's economic recovery "has paused" because of the slowing global economy and strong yen, as data revealed a growing trade deficit for the export-dependent nation.
The central bank left its key interest rate unchanged at between zero and 0.1 percent, but despite the crunch, did not offer any more easing.
"The pick-up in Japan's economic activity has paused, mainly due to the effects of a slowdown in overseas economies and of the appreciation of the yen," the central bank said after a two-day policy meeting.
"Improvement in business sentiment has slowed on the whole despite steady improvement in domestic demand-oriented sectors," the bank said in a statement.
It warned the European financial crisis was posing a serious risk to the global outlook.
Germany
"Survey Shows Germany Already in Recession: Report" (MarketWatch)
The German economy is already in recession, Die Welt newspaper reported Monday, citing its survey of 14 bank economists.
The German economy shrank in the final three months of 2011 and the pace of the contraction will gain momentum in the first quarter of 2012, the survey showed. An economy is in recession if real gross domestic product contracts for two successive quarters.
France
"France Is in Recession That Will Last Through March, Insee Says" (Businessweek)
The French economy will shrink this quarter and next, suggesting the nation is in a recession as investment and consumer spending stagnate, national statistics office Insee said.
The euro area’s second-largest economy will shrink 0.2 percent in the fourth quarter and 0.1 percent in the first quarter of 2012, before expanding 0.1 percent in the following three months, Paris-based Insee said yesterday in its quarterly forecast.
Confidence is slumping as businesses cut back on investment and slash jobs in the face of Europe’s deepening sovereign debt crisis. That’s driving up unemployment and prompting households to rein in spending. A shrinking economy may present a challenge to President Nicolas Sarkozy as he prepares for a two-round election in April and May of next year.
Brazil
"Brazil's Economy Slows Amid Global Downturn, 3Q GDP Stalls" (Fox News)
(NewsCore) – RIO DE JANEIRO — The Brazilian economy no longer appears to be immune from the global downturn, as third-quarter gross domestic product (GDP) came in unchanged from the previous quarter, according to official data released Tuesday.
Brazilian growth also slowed on an annual basis. GDP rose just 2.1 percent from the third quarter in 2010, compared to 3.1 percent year-over-year growth in the second quarter, the Brazilian Institute of Geography and Statistics (IBGE) said.
A survey of economists by Dow Jones Newswires produced a median forecast of 2.7 percent growth for the year.
The country's remarkable boom has slowed precipitously as eurozone debt fears weigh on the export-reliant economy.
Brazil grew by an explosive 7.5 percent in 2010, the IBGE said. But prolonged debt problems in developed markets struck a blow to Latin America's growth engine.
As a result, economists have slashed their forecasts for Brazilian growth in 2011 and next year.
United Kingdom
"UK Economy Likely to Shrink Amid Euro Crisis, Says BCC" (The Telegraph)
The Government must act now to repair the blow to business confidence dealt by the eurozone debt crisis, or risk an even greater setback for Britain's ailing economy, the British Chambers of Commerce warned.
The BCC said in its latest quarterly survey that although a technical recession with two successive quarters of negative growth was "not a foregone conclusion", at least one quarter of contraction was very likely in the first half of 2012.
"Britain's economy is at a critical stage – and now is not the time to shy away from the radical decisions needed to inspire confidence and increased investment for years to come," said John Longworth, the BCC's director general.
The business group said its latest findings showed the economic recovery was stalling, with broad-based weakness in the fourth quarter of 2011 across the UK manufacturing and services sectors.
"The results of our latest survey are a cause for concern and point towards stagnation in the first quarter of this year. Many of the balances are now at levels last seen in the third quarter of 2009, meaning improvements seen in the last two years have largely been cancelled out," said Mr Longworth.
Italy
"Italy Recession Fears As Growth Contracts" (The Telegraph)
Italy's economy contracted by 0.2pc in the third quarter, raising fears that the eurozone's third largest country is slipping into recession.
The weaker-than-expected data as adds to the woes of Prime Minister Mario Monti's technocrat government, which has to drive through a €34bn austerity package and crucial structural reforms that will stunt growth further.
Consumer spending dropped 0.2pc from the second quarter, with investment declining 0.6pc. Exports grew 1.6pc and imports fell 1.1pc in the quarter.
The Italian government predicts GDP will contract 0.4pc next year, but many economists fear the figure is optimistic.
"We can say without mincing words that we have already slipped into recession," said Intesa Sanpaolo analyst Paolo Mameli. "We expect GDP to keep contracting for the next 3-4 quarters. —
Is there any chance that our economy will not be seriously affected?
I thought we put paid to the ridiculous notion of "decoupling" years ago.
