Did you think that 2011 was the worst year for the US economy? If answered yes, wait until you see what happens in 2012! The world’s economic superpower is showing positive signs of slumping into yet another financial fiasco. An eminent person of New York feels that the wildfire is the leading indicator of the economy backsliding into another depression. The plunging non-financial services, manufacturing and exports, this becomes a deadly combination. Not only is the government lagging behind with the huge debt problems, the consumers also are knee deep in credit card debt for which they’re getting help from debt consolidation services.
According to the predictions of the financial analysts, the US economic growth will slow down in 2012, even though there are some recent data that shows upbeat signs. While some indicators like consumer price, housing starts have performed above the expectations of people, but our confidence in the performance in the economy in 2012 has already been shaken. Experts believe that slow growth and high unemployment rate will mark the lives of the Americans in the year 2012. With the ongoing austerity measures both in the US and Europe, a Japan-style lost decade is soon in the making.
As per the Conference Board’s report of the Global Economic Outlook, 2012, the US economy will probably grow at a rate of 1.1% in 2012, and this is even lower than the 1.5% in 2011. Apart from the European debt crisis, there will be too many risks that the economy has to face in the coming year. There may be yet another new round of debt debate within the Obama administration that can bring about some changes within the present debt situation of the nation.
Are there any contradictions to this news?
Well yes, there are certainly some contradictions of this news as some others think that the economy will be in a better state in 2012. They have seen a faint light at the end of the tunnel and there are some particular reasons that are supporting their opinion. Here are some signs that show that the economy will be better in 2012.
* The moderate economic growth is a signal that 2012 may not be a bad year for the US economy. The economic activity has increased from 0.6% in the first quarter of 2011 to 2.6% in the third quarter and the economists expect this to rise in the fourth quarter of 2011. The first quarter of 2012 will witness further growth and this may bring in some clarity within the US economy. The business confidence and the apathetic housing market remain big albatrosses for the US economy.
* One of the major paradoxes of the US economy over the past few years is how well the business organizations have been performing in contrast to the overall gloomy picture of the economy. In general most companies are flush with cash and there may also be more than expected profits in 2012 that will contribute to the overall revenue generation within the economy.
* The economists who are turning to the moderate projections of the economy say that there are fewer possibilities of the economy backsliding into yet another recession. Though there has been over-stress on the debt concerns in Europe, the American debt problems don’t seem to balloon out of control.
Therefore, though the Federal Reserve is trying its best to dig out of the US economy from the debt hole, there are no such noticeable results that can be mentioned. If you’re a debtor who is eager to stay financially secure in 2012, make sure you keep your personal debt ceiling low and also get help from debt consolidation firms to eliminate your debts.
