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Roubini forecasts dismal US growth

Bloomberg News / February 1, 2010

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DAVOS, Switzerland - Nouriel Roubini, the New York University professor who anticipated the financial crisis, said yesterday that the US growth outlook remains “very dismal.’’

Speaking at the World Economic Forum’s annual meeting, Roubini underscored concern that measures to rescue banks and fight the recession may be withdrawn too soon.

Of a Commerce Department report that showed economic expansion of 5.7 percent in the fourth quarter, Roubini said, “I think we are in trouble.’’ More than half of the growth was related to a replenishing of depleted inventories, he said, and consumption was reliant on monetary and fiscal stimulus. As these forces ebb, the rate will slow to 1.5 percent in the second half of 2010, he predicted.

He said that while the world’s largest economy would not relapse into recession, US unemployment will rise from the current 10 percent amid mediocre growth.

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