“The worst is over.”  It is a cry coming out of the US at the moment as mortgage data shows signs of support, consumer spending is up and the employment rate improves.

Many people are now asking if the slowdown was really all that bad.

True, there has been a credit crisis and the financials have been hit hard, but other sectors such as IT and energy have held up in the face of the slowdown.

IT is usually the first to suffer any loss in business confidence as businesses scale back spending in that area. Yet revenue of most IT companies is maintaining strength.

Energy prices also dive because of diminished demand, but oil hit records this week.

Finally there is the US growth; technically two quarters of negative growth constitutes a recession.

The US is yet to register one period of negative growth in this latest slowdown.

Will it happen? Probably not…the US Federal Reserve’s emergency relief will filter through the market sooner rather than late.

There might be one quarter of contraction but not two.

This might not be the best news for the UK with energy prices coming under further pressure and a central bank looking over its shoulder at rising inflation.

We might have a consumer driven recovery so interest rates will most likely be under pressure for some time yet.

This entry was posted on Friday, May 9th, 2008 at 11:45 am and is filed under Interest Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.