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Moody's says U.S. growth likely diminished

Aug. 15, 2011 at 3:08 PM   |   Comments

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NEW YORK, Aug. 15 (UPI) -- A second rating service has lowered its expectations of the U.S. economy, saying the prospects of a substantial recovery soon have declined.

Moody's Analytics, which The Wall Street Journal defines as "a sister company to credit-ratings company Moody's Investors Service," has lowered its forecast for the real U.S. gross domestic product for 2011 to about 2 percent for July through December, citing the tragic earthquake in Japan and debt problems in the United States and Europe.

Moody's Analytics said that is not fast enough growth to lower the unemployment rate, which is now 9.1 percent.

Next year, the company predicts, the GDP should grow 3 percent, which is about the pace required to keep the U.S. unemployment rate stable.

The firm said odds of a U.S. recovery that lowers the unemployment rate have "diminished substantially."

Further, the odds of a double-dip recession, the company said, would increase if stock prices continue to fall.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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