Recession

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Eurozone Emerges From Recession, but Recovery's Obstacles Will Prove Challenging

The Eurozone economy officially emerged from recession in the third quarter, but the uneven growth throughout the region and the lingering dangers of high unemployment continue to pose a threat to the recovery.

Comprised of the 16 nations that use the euro currency, the Eurozone saw its economy expand by 0.4% in the third quarter from the previous three-month period, Eurostat reported. However, the economy continued to shrink year-over-year, dropping 4.1% after a 2.8% annualized drop in the second quarter. The greater 27-nation EU economy grew by 0.2% on a quarterly basis.

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Soaring Productivity, Drop in New Benefits Claims Provide Silver Lining in the Dour Jobs Market

Productivity at U.S. businesses blew away forecasts in the third quarter and initial unemployment claims dropped to a 10-month low last week the Labor Department said Thursday. The reports raised hopes that the labor market may be starting to bottom.

The news sent the stock markets soaring as the Dow Jones Industrial Average rose 204.05 points, or 2.08%%, to close at 10,006.19, while the Standard & Poor's 500 Index popped 20.13 points, or 1.92%, to close at 1,066.63 and the Nasdaq Composite Index gained 49.8 points, or 2.42%, to close at 2,105.32.

Business productivity rose a higher-than-expected 9.5%, its fastest pace in six years, as companies squeezed more output from fewer workers. A survey of analysts by Reuters had projected productivity, or output per hour per worker, to rise at a 6.4% rate in the third quarter.

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Drop in Consumer Spending Could Spell Trouble for Economic Recovery

U.S. consumers curtailed spending in September for the first time in five months the government reported on Friday. Combined with a weak report on consumer sentiment, it increased fears the economic recovery could falter as government stimulus spending winds down, sending the stock market into a downward spiral.

The news sent the Dow Jones Industrial Average plummeting by 294.85 points, or 2.51%, on Friday to close at 9,712.73. Meanwhile, the Standard & Poor's 500 Index fell by 29.93 points, or 2.81%, to close at 1,036.18 and the Nasdaq Composite Index plunged 52.44 points, or 2.5% to close at 2,045.11.

The Commerce Department said purchases fell by 0.5%, after gaining 1.4% in August, matching the median estimate of economists surveyed by Bloomberg News. But consumers continued to increase their savings even as their incomes dropped. The Reuters/University of Michigan's consumer sentiment index rose to 70.6 in late October, up from 69.4 earlier in the month. However, that's still down from September's reading of 73.5.

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Here's Why the U.S. Rebound Will Be Stronger Than You Thinkcom

The U.S. economy may be experiencing a "V-shaped" economic rebound. But it's not the conventional V-shaped rebound – where the two sides are about even. We may actually be looking at an extended rebound in which the right (recovery) side of the "V" extends way up high, like a checkmark. Since that is way out […]

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Fed: Recession "Very Likely Over," but Threats Remain

U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday (Tuesday) that the worst recession since the Great Depression is "very likely over." However, Bernanke also said that unemployment would remain high and keep the recovery from accelerating. "Even though, from a technical perspective, the recession is very likely over at this point," Bernanke said, "it's […]

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