Is the United States Heading Towards a Double Dip?
The markets were killed today (Wednesday) after a number of economic reports were released. The reports were a stinging slap in the face for those who believed in a continued economic recovery for the United States, and vindication for those who feel that the country is sliding towards an inevitable "double dip" recession.
Weak jobs and manufacturing reports conspired to bring the DJIA down nearly 300 points on Wednesday. The NASDAQ and S&P 500 suffered heavy losses as well.
The prevailing mood in the country has turned from restrained optimism to an uneasy sense of foreboding. The job market is just not recovering as some people predicted it would (the national unemployment rate is still sitting at a very high 9%). The US housing market is officially in a double dip. The nation's politicians are continuing to bicker over the debt ceiling. The country continues to borrow money at an astonishing clip. The European Union is in turmoil. Food and energy prices are through the roof. Many believe that QE3 is just around the corner, which will lead to further inflation when the nation needs it the least.
The country (and the entire globe) is dealing with a laundry list of problems right now, and the idea of the country soon finding itself in a double dip recession certainly doesn't seem unlikely at this point.
Given all of the problems (and potential problems) that are currently facing the country, you certainly can't discount the possibility of a double dip recession presenting itself over the near-term. Already stressed US consumers are becoming more and more gloomy with each passing month, and this will certainly take a toll on the economy going forward. The inevitable inflationary pressure that would accompany QE3 (if it happens, which seems very likely) would just make things even worse.
Filed under: The Economic Meltdown