Recovery Of The US Economy

In the third quarter of 2009, there was a 2.2% growth in the US economy, much lesser than the 2.8% GDP recovery forecast. 

The slower growth movement is blamed at numerous causes.  These factors include weaker construction in the commercial sector, low investment on equipments and software, office software and equipment received low business investments, and consumers spending less than ever. 

Even with the decelerated growth pace, it is still a breath of fresh air that the economy is showing signs of growth.  Following months of decline, it was only from July-September 2009 where growth in the economy come about and many economists predict that the last quarter will have a higher percentage growth rate. 

At the start of 2010, experts are saying that the overall growth for the last quarter of 2009 will be at 4 percent.  This will mirror the economic growth of 5.4% in the first three months back in 2006. 

Even if the economy grows for the time being, the economy in the US still has a long way to go before it can be out of the woods.  At 10%, the rate of unemployment may go on rising.  This may cause economic growth in the US to significantly slow down to just 2-3 percent.

The growth in this year’s last quarter is credited to different companies resupplying their inventories that was dramatically exhausted during and after the economic recession.  Thanks to such improvement, manufacturers will double their production and will be a contributing factor to economic growth.

A rise in export sale and rise in consumer and business spending are also expected to give a hand on the last quarter growth. 

One key factor that lead to last year’s economic slump was the housing crisis where consumers fell short in paying for their mortgages.  This lead not just to people losing their houses but a lot of people had to spend less on almost everything including buying a home. 

The auto industry also felt the brunt of the recession where chief car manufacturers such as General Motors incurred huge debts and profit losses forcing them to lay-off thousands of workers and appeal to government bailout.  These contributed further to the decline in the country’s economy. 

First-time homebuyers were offered a $8,000 tax credit so that home-sales stayed floating and the cash for clunkers program has also provided a lot of car dealers new ways to sustain their sales income.  Even though the cash for clunkers program ended in August, the tax credit for homebuyers is still in effect and is expected to play a role in the continued economic recovery.

There are still doubts whether the economy could maintain its level of recovery for the next 2-3 years.  Economists say that the government needs to put forward additional stimulus programs in order to boost the spending of consumers, which is considered the lifeblood of the overall US economic activity.

Related posts:

1. The Importance Of Pricing After A Period Of Recession Everybody in the country, and indeed around the world, will...
2. Recession Opportunities Everybody in the country, and certainly around the world, will...
3. Recession Opportunities Everybody in the country, and without a doubt all around...
4. Euro Drops on Low Consumer Confidence Data and Ongoing Debt Problems The dollar rallied in recent trading activity as strong U.S....
5. An Introduction to Loans for Bad Credit in the Post Downturn Economy. Fiscal systems are undergoing radical changes in the current post-recession...