Stiglitz sees US economy contracting in H2 of 2010

“The likelihood of this slowdown is very, very high,” Stiglitz told reporters. “There is a significant chance that the number will be in the negative range.”

Stiglitz, a professor at Columbia University, called on Washington to make more funds available to state governments who face a drop in tax revenue. The US economy, the world’s largest, must grow at least 3 per cent to create enough jobs for new entrants into the labour force, he said.

The unemployment rate fell to 10 per cent in November from 10.2 per cent in October.
“If you don’t prepare now, and the economy turns out to be as weak as I think it’s likely to be, then you’ll be in a very difficult position,” he said.
The economy grew at a 2.8 per cent rate in July through September, after a record four straight quarters of contraction.