Americas

Is the US Economy Heading Towards a Recession?

US Economy

If we can judge from a few known indicators of the trading system, China’s droop and unrefined petroleum costs ­ the US economy could be heading towards a recession. There seems to be less income than the prior year and buyer trust is not what it used to be.

In any case, the individuals who have money available, see this as an impeccable time to fortify their investment portfolio. It is trusted that oil costs will stay at a low, gas costs could be twice the amount in the following year.

Is the US economy heading toward a recession? Well, let’s say it’s plausible, although the CNBC analysts seem to disagree.

“As a recession appears to rehash itself at regular intervals” claims Michael Pento, founder of Pento Portfolio Strategies, “numerous theorists are preparing for a repeat of a financial state of emergency.”

As The New Year Turns

Since the start of 2016, there have been complexities in the market, and with the cost of crude oil prices, the financial outlook has speculators contemplating the question: ‘Is the US economy heading towards a recession?’ American companies are taking in less revenue than the year before and consumer trust has fallen.

What’s Happening in the World Today?

Among collapsing oil prices and interest hikes:

• Wall Street closed at the lowest bottom it’s had in two years in mid­January
• Federal debt is near 600 per cent of total revenue
• Companies are billions of dollars in debt
• China reports its worst profit margin in 25 years

Nonetheless, for those that have a piggy bank, the opportunities to snatch up investment properties are tremendous, providing you can stand the wait. Not only that, but the stock prices will be lower. Some see this as a perfect time to strengthen their investment portfolio.

In spite of the turmoil, the unemployment rate is stable and low, the housing market has taken an upward trend and car sales report high profits.

History has shown a volatile relationship between a promiscuous stock market and a Federal debt of billions of dollars. The Great Recession carried on from the end of 2007 to June of 2009. It showed a bubble of $8 trillion dollars bursting before our very eyes. In 2008, stock prices dipped worldwide. The Dow Jones Industrial Average lost 33.8 per cent of its value. Americans lost an incredible 8.4 million jobs. By year’s end, a dark recession had engulfed the country, making it the third longest financial recess since World War II. Sound familiar?

What About Oil Prices?

Due to the spill in oil prices, riggers have found conservative ways to keep production cost at a minimal. Some companies have cut cost and labor back and others will eventually close, if only temporarily. If the supply of oil falls too far, and it is believed that oil prices will remain at a low, gas prices could multiply in the next year.

In the meantime, gas prices saw a light… a light it hasn’t seen since the ’90s with their record sales reports. More so, contracts calls for summer deliveries of less than $20 a barrel, allowing drivers to go the extra mile, whereas previously it was at $22 – $33 above crude.

Fed's recession model

Is A New Economic Crisis Brewing?

So, is the US economy heading toward a recession? To answer that we would have to look at the prophetic ingredients to current world conditions that make the possibility of an economic crisis very real. Let’s look at why it could happen.

Consumer purchases make up approximately two­thirds of the world’s economic train and China represented 34 per cent of the nation’s growth. Considering present­day unpredictability, the existing situation could be the basis for the worse recession yet. The temperature of Federal medium of exchange policies, debilitating Chinese economic system, and antagonistic international interest rates have a way of plummeting rather quickly.

Is the US economy heading for a recession? Speculators feel safe in saying the answer is ‘Yes, a financial recess in highly probable.’

Related topics:Predictions
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