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S&P says U.S. faces 20-percent risk of double dip
June 26, 2012 / 3:33 PM / in 5 years

S&P says U.S. faces 20-percent risk of double dip

NEW YORK (Reuters) - The United States faces 20-percent odds of a return to recession, rating agency Standard & Poor’s said on Tuesday, although it said a slow recovery remains the company’s baseline forecast for the world’s biggest economy.

Traders stand outside the New York Stock Exchange August 8, 2011. REUTERS/Shannon Stapleton

“But the risk of another downward leg on the recession remains real,” the agency said in a statement.

While S&P said it could be underestimating American consumers, years of stagnation, as Japan has seen, could also occur.

“There are differences between Japan’s situation and the current one in the U.S., but the problems are similar,” said Beth Ann Bovino, a senior S&P economist, in the statement. “Our hope is that policymakers in the U.S. have learned from Japan’s mistakes.”

The agency cut the U.S. sovereign rating to AA-plus last year in a contentious move that drew loud protests from the government. Moody’s Investors Service rates the United States Aaa, and Fitch rates the country AAA. All three ratings carry a negative outlook.

Reporting By Luciana Lopez; Editing by Padraic Cassidy

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