LONDON, England – Those fretting about a substantial downturn in the U.S. economy, need not worry. At least that's the way Ben Bernanke sees it.
Bernanke thinks the risk of a "substantial downturn" has receded in the past month. The Fed chairman thinks that past rate cuts, Federal tax rebates, and record exports will be enough to keep the economy from any a sharp nosedive.
He's not alone in his view. More than half of 48 private economists surveyed do not believe the U.S. economy is in or will enter a recession this year, that compares to 40 percent a month ago.
"The consensus now suggests the downturn in economic growth will be less steep than earlier feared, but the subsequent recovery to growth to its trend rate will take longer than hoped a few months ago," according to Blue Chip Economic Indicators.
Here's the breakdown. Third quarter growth at 1.5 percent, and fourth quarter at 1.2 percent. That's weaker growth than previously forecast, but still not a recession in their books.
But for 2009, the group of economists think U.S. growth will be 1.9 percent, that's the sixth month in a row that expectations have been ratcheted down.
As for inflation, they think it will average just 2.6 percent next year, compared to nearly 4 percent this year.
The group of economists also think the fed is done cutting interest rates which now stand at 2 percent, compared to 5.25 percent last September.
As to when the Fed raises interest rates, they think that won't happen until second quarter of next year.
These guys get paid for a living to make predictions about the economy and interest rates.
Even if they and Mr. Bernanke end up being right, and the U.S. avoids a substantial downturn, it won't feel like that to many Americans who are facing a fall in real wages, falling house prices, higher food bills, and record gasoline prices.
To them it feels like a recession, and in my book, that's all that matters.
Tell me what you think.
NEW YORK – Mark your calendars. On July 11, Apple's new 3G iPhone hits stores worldwide. (Well 22 countries at first, 70 by the end of the year.) If you believe the hype, this could be the device which really kicks open the door to Internet mobility.
Steve Jobs introduces the new iPhone 3G.
For those of you who missed the highlights, the phone, which was unveiled at Apple's Worldwide Developers' Conference, will be thinner, faster, and perhaps most importantly cheaper. Two hundred dollars cheaper!
During the presentation in San Francisco, Jobs admitted the first generation iPhone was too expensive for some customers. He said that about half of the customers who wanted an iPhone but hadn't bought one said it was due to the high price. That has certainly been the case for me.
As a result, the new phones will sell for $199 dollars for an 8-gigabyte model, $299 for a 16-gigabyte model. (one note – in some cases the monthly service may be higher.)
Some say the price cut is a sign that iPhone sales have been disappointing. Maybe. But I give Apple credit for acknowledging it got it wrong and acting quickly to fix the problem.
The other major development is from the developers. Jobs and other Apple executives showed off some of the third-party applications that will be available in the iPhone software store on iTunes.
There was a blogging platform called Typepad, a friend finder social network called Loopt, medical apps, games ... to name just a few. Many of the demos were met with applause from the audience, according to the bloggers who were streaming live from the event.
The other major announcement is that the Apple is now taking direct aim at Blackberry's strangle-hold on the corporate market. The new iPhone will have push e-mail, contacts and calendars.
Jobs says 35 percent of Fortune 500 companies have participated in beta testing. This confirms what I blogged about a few weeks ago. Research firm, Yankee group and others have been saying that corporate IT departments are starting to take a serious look at Apple. If Apple is now reaching out to them and making inroads, this could be a lucrative new area for the company.
Interestingly, the reaction on Wall Street was very tepid. Apple's stock dropped 2 percent. Some are worried the cheaper price will hurt profitability. Others are skeptical that Apple can take on Blackberry.
I don't share their pessimism. Yes, there may be some who early iPhone buyers who may feel they overpaid now that the price has been slashed. And we have to see how all these new third-party applications actually work.
But the faster more powerful connection and the innovative programs being developed offer huge promise. I held off on buying one the first round, but at $199 my willpower is fading. Apple says it expects to sell 10 million this year. Are you biting?
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.