U.S. economy still struggling for "post crisis workout": economist

U.S. economy is struggling for "post crisis workout" even though there are upbeat signs, one economist said on Wednesday.


In a press briefing about U.S. economic outlook, Steven Ricchiuto, managing director and chief economist of Mizuho Securities declared himself as the "most negative one".


"It(U.S. economy) is not ready to grow strong," he said, a recovery expansion will not be seen in 2011.


Ricchiuto admitted there were positive signs such as solid 4.4 percent rise in consumer spending for the fourth quarter 2010 and gradual upward creep in employment growth over the past six months. But these were only results boosted by extension of the Bush tax cuts and another round of quantitative easing.


"Seeing these developments as drivers of an accelerating the economy is likely to prove to be a mistake similar to that made by the growth bulls in early 2010."


He predicted that economy growth in 2011 is more likely to come in very close to 2.8 percent experienced last year, obviously below the optimistic consensus of 3.5 to 4 percent.


Ricchiuto saw the banking system pressure and the unhealed consumer balance as risks.


Ricchiuto predicted the the Federal Reserve will probably raise interest rate by the end of 2011 to tighten the monetary policy in wake of inflation expectation.
(Source:http://news.xinhuanet.com)