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There is increasing evidence that the U.S. economy has hit bottom. The index of leading economic indicators, which reveals turning points in economic performance, has increased for the last three months, at an annualized rate of more than 12 percent. Additionally, some big banks have registered profits, with a lot of help from the government. As summarized by Federal Reserve Chairman Ben Bernanke, in his semi annual testimony to the U.S. Congress, "aggressive policy actions taken around the world last fall, may well have averted the collapse of the global financial system." In recognition, last week the Dow Jones industrial average, for the first time since January, crossed the 9,000 mark, an increase of 39 percent since March. Also, commodities, such as aluminum, copper, gold and oil, have all rebounded
True, there still remain some significant laggards. Credit is still constrained and banks are still withdrawing from international finance operations, while unemployment has reached 9.5 percent. In June, new home sales increased on a monthly basis, by 11 percent from May. However, home sales decreased 21 percent, when compared with June 2008. Additionally, foreclosures continue unabated, while commercial real state mortgages are failing at the fastest rate in 20 years.
For both these positive and negative signs there is great expectation about the release of economic growth figures for the last quarter, which ended in June. Most economists surveyed by Dow Jones Newswires estimate a decrease of only 1.5 percent in U.S. economic growth in June, much better than the decreases of 6.3 and 5.5 percent of the previous two quarters. If less negative growth is confirmed by the government figures, there is ground for moderate optimism of slightly positive growth for the present quarter.
Isaac Cohen is the former director of the Washington Office of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). He is a commentator on economic and financial issues for CNN en Espanol TV and radio.
