The U.S. economy continues to stumble. More ominously, there are few positive signs elsewhere in the world that could give the global economy the boost it needs. The U.S. Federal Reserve did what it could on Tuesday, but that will not be enough to lift the United States out of the doldrums. Slow growth is going to be a fact of life for a while longer. That increases the pressure on policymakers around the world -- including Japan -- to ensure that they do not make a bad situation worse.
The longest economic expansion in postwar U.S. history has yielded to a slowdown that has economists using the dreaded "R-word" -- recession. The administration of President George W. Bush thought it had dodged that bullet last month when official statistics showed a slight gain in gross domestic product during the second quarter of the year. Original estimates showed 0.7 percent growth from April to June, but those figures are preliminary. They will be updated at the end of this month, and most observers expect the early numbers to be cut considerably, perhaps to zero or below. U.S. industrial production continues to contract; it has declined for 10 consecutive months, the longest slide in 18 years.
What is more worrying is that the outlook does not look much better. There were hopes that the third quarter would provide a boost, or at least a floor, to the slumping economy. Instead, the gloom is deepening. Private economists still project some growth in the second half of the year, but the consensus view is that expansion will be more anemic than originally anticipated: One authoritative survey cut growth projections by nearly a quarter.