Experts see trouble ahead for developed world – Roubini estimates chance of double-dip recession greater than 40 percent

By DAN PERRY, Associated Press Writer
Fri Sep 3, 1:37 pm ET CERNOBBIO, Italy – Is the global economy out of the woods? Two years after near-meltdown, with the U.S. looking sluggish, equity markets groggy and Europeans fighting a debt crisis, experts gathered in Italy offered a generally gloomy outlook — especially for the United States and much of the industrialized world. The doomsayers were led by New York University economist Nouriel Roubini, who warned in booming tones that “there is a significant risk of a double-dip recession in the United States” as well as in Japan and many European countries. Some of the assembled experts and leaders at the annual Ambrosetti Forum on the shores of Lake Como were somewhat more upbeat: economist Edwin Truman, a senior fellow of the Peterson Institute for International Economics, predicted that “the most likely global outlook is subpar growth.” But most appeared to agree on a sobering array of basic problems standing in the way of true recovery… The jobs picture is not improving and in parts of the developed world — such as Spain, with some 20 percent unemployment — it is disastrous. The U.S. unemployment rate rose in August for the first time in four months as hiring by private employers proved insufficient to keep pace with a large increase in the number of people looking for work. The Labor Department said Friday that companies did add a net total 67,000 new jobs last month, down from July’s upwardly revised total of 107,000. But more than a half-million Americans resumed their job searches, which drove up the jobless rate to 9.6 percent from 9.5 percent in July — a figure above the rate in Britain and Germany. “I see a very weak labor market,” said Roubini, who gained celebrity for predicting the global collapse of 2008 when others were still celebrating the boom times. He noted that unemployment is close to 10 percent and almost 17 percent when including discouraged workers or partially employed ones. He puts the chance of recession at 40 percent or more — a position he has staked in recent weeks — and said even weak growth would still feel like a recession. “The U.S. has to create 150,000 every month in the private sector just to stabilize the rate and prevent it from rising,” he said. “We’d have to create 300,000 jobs every month for the next three years just to bring back the level of employment to before this recession started,” Roubini said. “Nobody … believes the U.S. is going to create any time any amount of jobs like that,” he said. …

Experts see trouble ahead for developed world