Tax rebates gave temporary boost to GDP
The U.S. Department of Commerce reported last week that the national gross domestic product (GDP) increased by 3.3 percent annual rate in the second quarter, revised from the government’s previous estimate and exceeding economists’ expectations.
The growth was fueled by additional consumer spending after the federal tax rebates and by the continued declining value of the U.S. dollar that made American products more price-competitive.
The rebound came after two dismal quarters. The economy shrank in the final three months of 2007 and grew in the first quarter at 0.9 percent pace.
Federal Reserve Chairman Ben Bernanke recently warned that the economy will be weak through the rest of this year.
Economist Peter Morici, who is ranked as the most accurate economic forecaster at Marketwatch.com, predicts the economy will hit another pothole in the second half of the year, as the impact of the tax rebates subsides.
"Consumer spending was given a big bounce from the stimulus package tax rebate checks, especially during May and to a lesser extent in June. However, the effects of that stimulus package have now worn off and consumer activity is slowing," said Morici, professor at the Robert H. Smith School of Business at the University of Maryland. "My forecast is for a very small gain of 0.2 percent in July but that still would not be enough to offset the effects of inflation. Real consumer spending appears to be contracting … The good news is that productivity growth remains strong, American industry continues to bang out new creative and attractive products, and the economy is likely to have only a shallow recession. The economy should bottom out in the fourth quarter of this year and the first quarter on 2009, and then recover. Don’t look for the Federal Reserve to raise interest rates before 2009."
Fiserv’s Facebook product wins banking technology award
Fiserv Inc., a Brookfield-based provider of information technology services to the financial industry, announced that its MyMoney convenience banking application on the Facebook Platform has won The Banker Technology Awards 2008 Retail Award for Online Innovation.
The Banker Technology Awards seeks to identify and celebrate excellence and innovation in banking technology. The awards are presented by The Banker magazine.
MyMoney enables companies and developers to build applications for the Facebook website, where all of Facebook’s 100 million users can interact with them.
Recognizing the popularity of Facebook among Gen Y consumers, who are desirable prospects for many credit unions, Fiserv developed MyMoney to enable Facebook users to search for and join a credit union and manage their funds via the familiar Facebook interface.
Using MyMoney, they can view account balances, history and transfer funds right from their Facebook profile, with multiple layers of security protecting their data and accounts.
"At a time when financial institutions are competing to gain the wallet share of Gen Y consumers, Fiserv’s MyMoney can serve as a strong differentiator, making it easy to reach this growing market through the increasingly popular vehicle of Facebook.," said Tom Neill, president of Fiserv Depository Institutions Group.
MyMoney, which launched in February 2008 with about 40 credit unions, is now being sold through all of the Fiserv credit union companies.