LIA Monthly Economic Report - The Negative Feedback Loop
By: Dr. Pearl M. Kamer, LIA Chief Economist
Recent indicators suggest that the nation''s economy has inched closer to a double?dip recession. Second quarter GDP growth was revised downward to an anemic 1.0%, largely because exports were weaker than first reported. Consumer sentiment is at a low point and the housing market continues to struggle. Even more telling was the fact that the nation failed to generate any jobs in August. The economy is caught in a "negative feedback loop" in which each bit of negative news reinforces the economy''s downward slide. Moreover, policymakers apparently lack the monetary and fiscal tools to halt the slide.
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