This is the VOA Special English Economics Report.
government says the United States economy shrank at an annual rate of one
percent in April, May and June. The decrease was less than expected, and much
less than at the start of the year. The improvement was partly the result of
increased government spending.
Another report on Thursday showed a
small drop in the number of newly jobless workers last week. There was also a
drop in the number of people on long-term unemployment assistance.
On Tuesday, President Obama nominated Ben Bernanke for a
second term as chairman of the Federal Reserve. His current four years end in January.
BARACK OBAMA: "Ben approached a financial system
on the verge of collapse with calm and wisdom, with bold action and
out-of-the-box thinking that has helped put the brakes on our economic
Ben Bernanke led the central bank through
extraordinary efforts to contain the worst economic crisis since the nineteen
thirties. But economists say it may still be too early to congratulate him on
rescuing the economy.
He is an expert on the causes of the Great Depression.
Yet critics say he failed to do his part to prevent the crisis.
He has critics in both parties. Democrat
Chris Dodd, chairman of Senate Banking Committee, says Ben Bernanke did not act
fast enough at the start. And many Republicans criticize the Fed chief -- himself
a Republican -- for what they see as too much spending.
used the bank's power to create money. The Fed established new lending programs,
and approved large purchases of government securities and mortgage-related
the president's decision to renominate Ben Bernanke for Senate confirmation is
considered a safe one. In his second term, he will have to consider how and
when to withdraw heavy intervention in the financial industry and raise
interest rates. The Fed has reduced short-term rates to almost zero.
government spending could cause inflation unless officials find just the right
time to act. But if they act too soon and raise interest rates too much, the economy
could crash again.
White House budget office on Tuesday lowered its estimate for this year's
federal deficit. The government will probably spend less than it thought on the
The estimate for the next ten
years, however, is higher because the recession was deeper than expected. But even
after the economy recovers, the deficit is around four percent of the economy.
And that, as the report notes, is "higher than desirable."
And that's the VOA Special English Economics Report, written
by Mario Ritter. Transcripts and podcasts of our reports are at
voaspecialenglish.com. I'm Steve Ember.