President George W Bush says he will push for an economic stimulus package to stop the US economy slipping into recession. The president said he favours a plan that would focus on tax cuts for individuals and businesses rather than expanding federal government spending.
He told reporters: “Our economy has a solid foundation, but there are areas of real concern. The economy is still creating jobs, though at a reduced pace, consumer spending is still growing, but the housing market is declining.”
The total cost of the measures would be around 95billion euros – 1% of US GDP. They are being proposed as the latest projections from the Economist Intelligence Unit suggest that the US economy grew at a rate of just 1.8% last year .. compared with 2.9% in 2006 and 3.1% in 2005. The forecast for this year is just 1.2%
A survey of US consumers’ sentiment showed that it picked up a little bit in January despite all the talk of a possible recession, a weak jobs market and falling share prices. But the Reuters/University of Michigan survey did show that consumers have a negative view about their current finances.