The US economy suffered its worst in the last quarter of 2008, with the GDP shrinking by a massive 6.2% which was worse than the most pessimistic estimates. The continuing crash in exports, and also the continuing fall in the consumer spending has resulted in the GDP decline.
The exports went down by 17% last month due to sharp decline in engineering and automobile exports. The coming months are also expected to be very bad because exports will continue to suffer badly because the importing countries in Europe / Japan and China are in real mess and are doing all that is possible to cut down their imports.
Simultaneously, US is also likely to be affected by continuing increase in the job losses across all the industries , especially the export oriented industries and also the banking and insurance sectors. The continuing fall in the property prices is expected to force more people to fail on their mortgage payments which can accelerate the problems of the banking system. Already , the large banks of US have gobbled over 300 billion dollars of tax payers money, and are still in need of another massive dose of government fund infusion.
For its part, the largest insurance company in the US, the AIG, is asking for another 60 billion dollar bailout money from the US FED , citing losses in its loan portfolio created due to falling values. At least till the end of 2009, no recovery is likely in the US economy.