No economic growth for years to come

Roubini's problem is he can't shake off the notion of growth, in this case posing as "lackluster growth". And everything he says, and presumably thinks, falls in that light. Maybe he’s so happy to be invited and celebrated everywhere in the world as Dr. Doom that he doesn't want to take the risk of scaring his benefactors away. "Doom" thus comes to mean low growth, while flat-out contraction is off the agenda.

But how realistic is that? Even allowing for the fact that the GDP is "not a very accurate" way to measure growth, it's already "officially" at 1.6% and heading down short term (a correction to 1.2% is in the works). So what are the short to mid-term prospects? Well, 70% of GDP is the American consumer, so there's where to look. The 91-day trailing Growth Index of the Consumer Metrics Institute has gone all the way down to -5.79%, while official GDP remains at 1.6% for the moment. That’s a difference of 7.39% that will have to be explained away somehow. More...

Roubini: 4Q GDP a Joke

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Roubini Calls U.S. Growth ‘Dismal and Poor,’ Predicts Slowing
Simon Kennedy and Erik Schatzker
Bloomberg
New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth “very dismal and poor” because it relied on temporary factors.

Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.

“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “I think we are in trouble.”

Roubini said while the world’s largest economy won’t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges.

“It’s going to feel like a recession even if technically we’re not going to be in a recession,” he said.