There are some that are saying there will be another recession once the recovery picks up completely–what a sad thing to say. It may come to that, though. Why?
Because the price of imports are increasing as we speak.
That spells bad news for the economy as domestic goods aren’t seeming to hold their own. To be exact, within the last three months have shown a tremendous increase in the price of foreign goods. Back in March of 2010, the prices went up by .5%. In April, it went up by .9%. One could even consider the blame on fuel pricing, but that’s not it. Excluding petroleum, prices still went up a healthy .5% with the uprise of industrial goods and even food supplies.
Now the reason for the assumption that the recovery is still in swing (though not a full swing, not yet anyway) is the statistic that states unemployment claims have dropped. However, mass hiring for new jobs haven’t resumed yet, so there’s still time for growth in the economy. Moreover, export prices in the U.S. have also increased–by a wonderful 1.2%, the largest jump since 2008. Good news….
But are the good news too late? The economy is majorly supported by its imports, so even at a recovery, is it possible that once we hit the peak, we’ll just drop again? Very possible. The real estate market also is another sign that while the state of things is slowly picking it up, it’s not picking up solidly enough to stymie another recession that’ll drag this country down the tubes yet again.
Who knows…. It may be a precursor to another recession. There’s no way to know until it hits us. Till then, do yourself and the country one favor: spend your money, but not all of it. You still have plenty of bills to pay, and your credit rating is very important.