Yesterday I wrote that we aren’t mired in a typical recession and that we shouldn’t expect a typical recovery. What we’re going through is qualitatively different this time, and we should not expect the consumer-driven US economy to return to its formerly robust health soon.
Well, General Electric Co. CEO Jeffrey Immelt agrees that this recovery will be different, and not in a good way. Speaking in Singapore, Immelt warned today that high unemployment and slower lending will drag on U.S. economic growth, likely resulting in the weakest recovery in decades.
“There are reasons to believe that this recovery could look different from ones in the past. There’s not a lot of confidence that it’s going to be great.”
“Easing up money has always been the elixir to keep the economy in recovery mode. But once you get interest rates to zero percent, you can’t go much below that, which is kind of where we are right now.”
“A lot of the jobs lost in financial services and construction are never coming back.”
Later in the same address, Immelt said the following:
“How the Chinese economy does in the short-term is probably more important than sitting there praying for a robust recovery in the U.S. I bet they (the Chinese) make it through this crisis and come out stronger.”