Pimco: Economy Will Hit Crawl in Second Half of Year

Pimco co-CEO Mohammed El-Erian says growth in the U.S. economy will continue to appear healthy during the first half of 2010 because markets will bounce back amid the huge fiscal stimulus and inventory rebuilding.

“Look for growth rates to be an annualized 4 percent to 5 percent in the first half of the year,” El-Erian says.

The second half of the year is a different story, El-Erian says: Growth will likely slow in the second half to an annualized 2 percent.

“Unfortunately, we will also have persistently high unemployment,” he told MarketWatch. “That’s very unusual in the United States, which tends to have a flexible labor market.” (more)