Uncertainty driving recession fears
Economy slows yet again, prompting concerns.
Is another recession imminent? US growth has dropped again, slowing to only 1/5 percent in the last quarter. The continued decline could become a self-fulfilling prophecy as investors begin bracing for recession.
Is another recession looming? Yes, if uncertainty persists.
The slowing economy has many speculating that the Federal Reserve will have to take yet more action to stimulate the economy.
Despite the slowing pace of growth, there are some bright spots in the news. Home sales have continued to improve with prices rising. Builders have already stopped new construction and bank foreclosures are being sold, although most of the purchases are from investors looking to convert the homes to rental properties.
Exports have also risen to 5.3 percent, and government cutbacks across federal, state, and local levels have eased off, keeping more people employed and contributing.
However, investors and consumers both are holding tightly to their money. Despite historically low interest rates, few people appear willing to buy or invest. Instead, Americans are saving, with a new personal savings rate of 4 percent, up from 3.6 percent in the second quarter.
Above all, the indecision in government and the pending elections have perhaps the greatest impact on the economy. Questions abound over tax cuts, fiscal policy, and of course, health care. Depending on who wins the presidency in November, the US could become involved in overseas conflict, or not.
Investors don't like uncertainty, and as long as uncertainty abounds, we can expect a weak economy and continued financial difficulties. This is a situation that will certainly persist until November, and possibly well into 2013.
© 2012, Distributed by NEWS CONSORTIUM.
- - -
Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: recession, economy, uncertainty, politics
Rate This Article
Leave a Comment
More Business & Economics News
- Web developer: Earn $60,000 a year - without college degree or debt
- China, India, Brazil could dominate global investment by 2030
- Unemployment in U.S. comes roaring back - in a big way
- Criminally unfair? Why disgraced Enron CEO Skilling could see freedom sooner than you think
- Berkshire Hathaway Inc. hits first quarter record profit at 51 percent
- China and Japan now hold record amounts of Obama debt
- Does shift to mobile mean Facebook's salad days are done? Not at all
- U.S. annual growth rate slowest since 1929, start of Great Depression
- Prosperity gap between races in U.S. widened during recession
- Fr. Paul Schenck: Finding Living Faith on Catechetical Sunday
- The Movie Yellow: Incest as 'Normal' and Cassavates's Slides Into the World of Woes
- The Chicago School Teachers Strike Reveals the Need For School Choice
- The Sexual Barbarians and the Dissolution of Culture
- The Happy Priest Challenges Us to Ask: Who is Jesus to Me?
- Michael Coren on Canadian Public Schools: Teachers, leave those kids alone
- We Cannot Ignore Our Consciences: Cardinal Dolan On Religious Liberty
- In the Face of Danger, Successor of Peter Travels to Lebanon as a Messenger of Peace
- Reflections on the Dignity and Vocation of Women: Who or What?
Disclaimer: The columns, articles, advertisers claims and any other features provided on Catholic Online Business & Economics are provided for personal finance and investment information and are not to be construed as investment advice. Under no circumstances does the information in this content represent a recommendation to buy, sell or hold any security. The views and opinions expressed in an article or column are the author's own and not necessarily those of Catholic Online and there is no implied endorsement by Catholic Online of any advice or trading strategy.