GM Strike Could Intensify Economic Slowdown
From Staff Reports
In a report from the Associated Press it was revealed that
The strike against automaker General Motors Corp. (GM) could do significant damage to the economy, if the two sides can’t settle the standoff by the end of the week, The Associated Press reported yesterday (Tuesday).
If the two parties settle the dispute by the end of the week, the strike will have little impact on the overall economy. If the conflict is not resolved, however, it could exacerbate the housing downturn as well as the ailing credit market and stall economic expansion, analysts and economists say.
"If the strike lasts a month or longer, it could take 1 percentage point off the real GDP in the fourth quarter, or more, even if activity ramps back up in December," Merrill Lynch analyst David Rosenberg told The AP.
Even an impact as small as 1% could be significant for an economy facing adversity and penciled in for a mere 2.1% real gain by year’s end. The strike could also skew gauges being closely analyzed by economists and the Federal Reserve.
While striking workers do not typically qualify for jobless benefits, those driven out of work by the strike would. That means the total number of workers filing for jobless benefits could see sporadic increases over the next few weeks.