In today’s business section of the NY times there was an article concerning the current economic growth of the US economy. There was overall joy in the fact that the growth rate in the third quarter was at about 2.5% up from the first quarter’s 1.3%. Though this is not enough to cover the unemployment, economic bust or even to mitigate the fears of a second recession it is good to see that the economy is not stuck in a slump, but instead is recovering.
The article continues by highlighting the fact that though the economy is growing there is still a low level of consumer confidence amidst all the positives efforts being taken in combating the current economic climate. This low consumer confidence has reduced the effect of the increased prosperity of the stock market. Along with this there are many other situations were the good is lessened by other occurrences. For instance, the article states that though the number of people filing unemployment has decreased, real income received by workers has been on a decline. Other effects of other factors, which had previously been slowing down the economy’s recovery such as, the earthquake in Japan (disrupting the global supply chain) are slowly fading away as indicated by the markets increased growth rate.
The fears surrounding a next recession seem to be a big factor in restricting the increase in economic growth. With this in the minds of consumers and businesses how will the economy manage?
Well, at least domestically it seems like the economy is on the right track. Even really slow growth is better than no growth. The biggest question now seems to be what will happen in Europe. If the sovereign debt crisis is handled poorly the mediocre growth rates in the US might not be enough to stave off increased economic difficulties, maybe even a second recession, in the months to come
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