The U.S. economy is contracting again, a sign that the recession never really ended, and the unemployment rate will exceed 10 percent, said David Rosenberg, chief economist at Gluskin Sheff & Associates Inc., a wealth management company, in Toronto.
Second-quarter growth “looks as though it’s going to be revised down. We just had the Fed cut its forecast,” Rosenberg said today in an interview on Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays, citing recent economic indicators.
“We’re really building in something that’s negative for the third quarter,” he said. “My sense is the (economy) will contract in the fourth quarter as well.”
He is forecasting the yield on the U.S. Treasury’s 30-year bond will fall to “2 to 2.5 percent.”
The unemployment rate will “probably pierce the old cycle high of just over 10 percent,” said Rosenberg, who in November said the jobless rate could reach 12 percent. A month earlier, unemployment was 10.1 percent, a 26-year high, according to Labor Department data.
“We have to look at the contours of this very brief economic expansion,” which was “just along the continuum of what was an otherwise downward trend,” Rosenberg said. “That’s why I call this the single-scoop as opposed to the double-dip.
“I don’t know if the recession that started in 2007 ever really ended,” he said.
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