"Being unemployed is frustrating, demeaning and, at this point, frightening." Anyone who has any doubt about the devastating effects unemployment can have will learn a lot from statements such as this one, captured in a recent survey undertaken by the John. J. Heldrich Center for Workforce Development at Rutgers University in the US.

The US economy is going through a severe and protracted recession which is projected to bottom out later this year, as fiscal and monetary support takes hold and the housing cycle levels out. In 2010, even after a recovery gets under way, GDP growth is likely to remain weak because of the slowdown in capital accumulation, negative wealth effects and still adverse, albeit improving, financial conditions.

The global economic crisis is affecting families and communities across the planet. With regions bearing the brunt of the crisis, affecting businesses, jobs and people generally, regional policies are very much part of the solution.

The US economy is facing extremely difficult conditions. The financial crisis has intensified at a time when growth had already been weakened by the prolonged housing downturn. A credit crunch is likely to result in a pronounced contraction in activity over the near term and a further deterioration of the labour market.

The United States is dependent on fossil fuels for almost all its energy supply. Coal dominates electricity generation, accounting for half of its power production, with nuclear and natural gas around one-fifth each.

Healthy gains in private consumption have helped to keep GDP growth above trend so far this year. However, the correction in residential construction is likely to accelerate over the near term, and housing wealth could decline which, together with weaker labour market conditions, could lead to lower consumption growth over time. Real GDP growth should therefore slow to a pace below potential in 2008 and then recover in 2009, although there are considerable downside risks. Headline inflation has recently moved up, but core inflation seems to have stabilised near 2% and, assuming that energy prices level out, inflationary pressures should remain fairly moderate over the projection period.

Few economic questions in recent times have challenged policymakers and economists the world over quite as much as the US current account deficit. Some worry that it is a global economic time bomb. More recently, a contrasting argument has emerged that dismisses the deficit as little more than a harmless mirage. But most serious experts simply agree that the present situation is unsustainable. What has caused the deficit? Why is it a problem and how should it be dealt with?