Has the US economy emerged from recession?
While investors in the UK continue to digest the news that in the opinion of Mervyn King, the Gov of the Bank of England, the UK economy is moving out of recession, it appears the same may be happening in the US. Economic data from the US seems to indicate that economic activity has increased and the US would seem to be on a growth path once again.
If this is the case this will have a significant impact upon the worldwide economy and drag all economies around the world higher and higher as the US recovery gets under way. However, before we all get carried away it is worth remembering that the US may well be in a similar situation to the UK with a potential double dip recession if liquidity and inflation are not correctly managed. Too many investors seem to be getting too carried away in the short term which is ultimately increasing confidence to the point where some people are moving to a blue skies scenario.
Despite the fact that the economic scenario in the UK and the US has improved over the last few weeks there is still a need for caution in the short to medium term. A return to a recession in 2010 is not entirely out of the question and would be a disaster for the US, the UK and the worldwide economy.
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