As the nations of the developed world face an ever greater chance of a renewed recession, they hold out hope that some nations will be able to stand against the tides of economic stagnation. Although the Great Recession of 2008 began on Wall Street, it has appeared that the United States may be able to resist the chance of falling into a new recession.
However, new data that emerged earlier this week presented a more sinister outlook than what American economists had been touting for the past month. Dismal data that recently emerged included:
- Lower than expected GDP. GDP growth for 2011 came in at only 1.7%. This was sharply lower than the 2.5-3% that economists were predicting earlier. Also, fourth quarter GDP came in at only 2.8%. Most economists were expecting 3.2%. Additionally, most of the fourth quarter GDP growth was the result of companies restocking inventories. Real final sales would only have been about 0.8% for the fourth quarter, substantially lower than the third quarter.
- Housing sales and prices come in lower. The American housing industry continues to decline. Although many contractors continue to build more, the prices and demand for housing is clearly still on the downward trend. A few economists say that the United States housing market is about to hit bottom. However, many of them have been saying that for three years. It is beginning to become evident that economists aren’t able to predict when the housing market is going to recover.
- Social unrest. The United States is beginning to see signs of social unrest, which indicate that people are more concerned about the state of the economy. In Oakland, California, many of the protests turned violent as citizens turned their rage towards police and destroyed city property. Riots over austerity measures in Greece had a negative impact on the economy and are likely to have the same effect in the United States as well.
- CBO report. The Congressional Budget Office in the United States projects GDP will decrease significantly in the fourth quarters of 2012 and 2013. A lot of this is likely because of the austerity measures that the United States government will need to implement in the near future.
As the Eurozone continues to falter, many people would hope that the United States would be able to help keep the world from tumbling back into recession. Their hopes may be short-lived as the United States is unlikely to be the white knight the global economy is looking for.
