Falling demand in the United States had weakened growth heavily, where the fourth quarter of the prior year had seen 3.8% contractions as consumer confidence weakened and unemployment rate surged which resulted in eating away all the spending behaviors of individuals in the States.
Its been more than a year, the Americans had been struggling with this endless deterioration in their economy where now they dipped massively in a recession heading toward a bigger issue which is deflation.
The dramatic fall in consumer prices from the high levels, which was recorded earlier, had resulted in pushing the states to face this demon; the increasing risk had obligated the Federal Reserve to consider using new methods that would bolster their economy, such as the quantitative easing.
Due to that, the US indices on Friday closed in green, Dow Jones industrial average inclined 2.70% or 217.52 points reaching to 8280.59 levels, S&P 500 added 2.69% or 22.75 points reaching to 868.60 levels and NASDAQ inclined 2.94% or 45.47 points reaching to 1591.71 levels. The gains seen on Friday managed to pair some of the losses that was seen earlier since the beginning of the year, giving out some hopes that indices will start recover once again.
In the FOMC rate decision that took place two weeks ago, the statement released stated that the feds stand reading in order to purchase long-term treasuries just to prevent the diffusion of deflation in their economy. Yet, till now a dissent is taking place, some members believe that a purchase must take place now though others believe that it's early for the feds to purchase.
Last week rumors came out that Geithner and Barrack Obama will come out today to release the fiscal plan that they would be using in order to bolster their economy. The plan was delayed so the meeting was postponed until tomorrow where part of the plan will be released in order to spread back some tranquility in those jittery markets.
From the fundamental side; the US calendar only holds some news about the Balance of Trade and the Retail Sales reading. According to estimates the trade balance deficit might narrow down to -35.9 billion dollar from the previous -40.4 billion dollars, also retail sales in January improved to -0.7% from previous -2.7%, the sales less autos fell 0.3% in the prior month from the previous -3.1%.
Dear reader, this week might be a good week for the Americans where new plans could be introduced in order to be used to bolster their economy from the endless deteriorations.