2009-11-08 09:07:49 - “Mann International”: America’s technical exit from recession shows the Government is the new consumer.

Sources close to “Mann International” say that the firm remains of the opinion that US consumers will remain conspicuous by their absence from retail sales figures for the considerable future.

The US technically emerged from its long recession last week when data showed that its economy grew by 0.9% in the quarter through September – equivalent to annual growth of 3.5%.

Although markets rallied strongly on the news, gains fell away sharply the next trading day after investors digested the fact that much of the rise in consumption could be attributable to government spending in the form of incentive schemes like the so-called “cash for clunkers” program.

Analysts at “Mann International” said that the Obama administration had to consider whether the withdrawal of such programs would derail the recovery and said that the US government was effectively the new US consumer.

Treasury Secretary, Timothy Geithner, recently said that there was no need for a second stimulus package for the economy but “Mann International” is thought to believe that the extension of other incentive programs like the first-time buyer tax credit would represent additional stimulus “by the back door”.

One of the “Mann International” sources suggested that premature withdrawal of stimulus could prompt the double-dip, W-shaped recession that economists have dreaded.