To stabilize US economy and the financial system, the Federal Reserve has announced to offer another $800bn stimulus.

According to the US Treasury Secretary Henry Paulson, the package has been announced for the availability of more lending to consumers.

The new package will be used to buy mortgage-backed securities and thaw out the freezing consumer credit market.

US President-elect Barack Obama says: “Budget reform is essential because of the current economic crisis. And it’s not an option, but a necessity.”

Meanwhile Mr. Paulson said, “It would take some time to get out of these difficulties in US market and economy and we will have to face new challenges.”

“We are determined to handle these situations efficiently and use all the available tools to strengthen our financial institutions and stabilize financial markets.”

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Figures from the commerce Department show that between July and September, the US economy has shrunk at an annualized rate of 0.3%.

Though they showed the sharpest contraction of the economy since 2001, the gross domestic product (GDP) figures were better than expected. On the other hand, consumer spending that constitutes two-thirds of the US economy saw 3.1% shrinkage and it was the first contraction since 1991. This 0.3% shrinkage followed 2.8% growth during the last three-month period.

The figures related to shrinkage suggest that the US economy is halfway to the standard definition of a recession that shows two successive quarters of negative growth.

However, in the US the official definition is different and according to this definition the US economy is not officially in recession if the National Bureau of Economic Research doesn’t decide it.

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Because of the stricken US economy and the falling dollar, Mexicans are sending less money to their homes.

According to Mexico’s central bank, the sharpest fall was recorded in remittances during July that was 6.9% down compared to the same period last year.

Besides oil revenues, remittances are counted Mexico’s second largest legal source of foreign income. …read the rest of this entry»

According to the US Commerce Department, a 3.3 percent growth was noted in the US economy during the second quarter and it was much higher than the expected 1.9% growth.

This growth is being considered a result of strong exports, weaker dollar and tax rebates that help to boost consumer spending.

During the first quarter, GDP grew at a rate of 0.9 percent and a 0.2 percent contraction was noted during the last three months of 2007.

However, it has been warned by the Federal Reserve that economy will be weak in this year.

“We are beginning to see some sunlight, but we are not out of woods yet,” stated John Wilson, who is equity strategist at Morgan Keegan.

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During July, a considerable increase was noticed in big-ticket orders for the US factories. It indicates continued progress in export sales and a boost to business investment that has been decreasing in recessive economic conditions in the US for the past many months.

However, some economists seem worry as they believe that increasing economic weakness overseas and a rebound in the value of the dollar can become the cause to end this export boom till the end of this year.

On Wednesday, the Commerce Department reported that there was a 1.3 percent increase in durable goods orders in last month and it was far above than 0.1 percent that Wall Street was expecting.

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