There’s both good news and bad news. Good news is that in this year (2012), the economy is not going to grow worse in all probability. However, the bad news is that it is not going to grow any better too. So, as per the economists, this is going to be another year of simply muddling along the same path. However, there are some fears which have started to worry the economists. These are not only the problems that are brewing within the nation but outside the nation too. One of the greatest factors that is bothering the economists is the persistent debt crisis in the European zone.
The economy of US in 2012
There’s a possibility that the Euro zone is going to face a meltdown. This again is supposed to drag down US and also other parts of the world like China into recession. Even if the recession does not really happen, the economic situation and the levels of debt in Europe is definitely going to have an effect on US economy and its economic power.
However, the good thing is that the markets in the New Year are seeing a fresh start and is supposed to create a fresh roll of market reports. This may temporarily help to move the focal point from European debt crisis to that of US financial markets. The ISM surveys based on the manufacturing and the service sectors, provides a good look with regards to the business activity and the hiring related to this. This somehow points to development in the job sector and finances too.
But, on the other hand, the stock reports of the nation are not positive enough. Though, Dow Jones ended 2011 with 5.5 percent gain standing at 12,217. S&P 500 along with NASDAQ recorded a historic fall; it’s lowest since the year 2008. S&P’s fall has been so high that it listed at a flat rate of 1257.60. NASDAQ on the other hand slumped to as low as 1.8 percent for the year to only 2605. But, Dow has inched up more than even 11 percent since the year 2009.
Other than this, according to some of the economists, the outlook for this year is:
American economy is going to continue expanding along with the Gross Domestic Product or GDP nearing to 2% throughout the year 2012.
Unemployment percentage is going to remain in the range of 8% as the employees are going to reform their working skills and the baby-boomers are going to delay their retirements based on economic issues like that of the suppose second recession that is going to happen within 2013.
Residential housing is also supposed to continue to struggle. This is because the affordability of the homeowners are not going to see any significant change and the home-ownership rate is going to decrease too.
The housing prices however may start to stabilize and may reach a balance within 2013 and may be late. This can be due to the growth in the population which is almost going to out-grow supply.
Housing is in fact supposed to bottom in the year 2012. But, there is some sparks of optimism that the small businesses and other corporations too may start hiring again. The lowered importance and effect of the Japanese earthquake and tsunami and the high gasoline prices, is going to help with the growth of the hiring factor.
Now, the market watchers, the investors and the economists are looking forward to the reports on the performance of the stock markets (the first five days of the year). This report is going to almost change the view as to how the stock markets are going to perform this year and what is actually the status of the economy in this New Year.
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