Is the worst over for the US economy ? Week ending 14-Aug

This week, the Fed announced that the longest period of US economic decline is coming to an end and the top economic outlook supporting that was that headline unemployment rate in Jul-09 fell from 9.5% previously to 9.4%.

In the US. the monthly rate of job losses in July has slowed to 250,000 from 600,000 at the start of the year, but the statistical computation of unemployment only improved because 400,000 workers dropped out of the labour force and are no longer looking for work.

So, the thing is, if the state of the economy is getting worse at a slower rate than before, can one argue that the worst is over?

I foresee that given the high rates of foreclosure in the US mortgage market and the continuing high unemployment rates, US household income is going to continue to be put under pressure and any economic recovery will be sluggish for the rest of the year.

Eric Tan, London