Is 2008 a Year for Recession ?

As of this writing, US are facing a huge challenge from different economic areas. The gas prices are on its all time high as oil prices continues to rise. The record breaking unemployment rate has got everyone to think twice about their current jobs as more and more companies closing down or transferring operations. Last but not the least is the inflation, which is partly caused by the rising gas prices is also heating up. Some people can’t just go out and but the things they used to have because of the continuous increase of different products.

Judging from the current status of the country, most people ask if US will finally be in a recession in 2008.

There are two sides of the story about the upcoming (or not) 2008 recession.

The first idea and the more popular is that the country will or even at a recession today. The clear indicator: consumer spending. Because of the inflation and unemployment, most consumers are not really shelling out their money for anything today. As of this writing, malls in different countries are closing down one by one because consumer spending is not as ideal as it was.

Another and a more important indicator is the slumping real estate business. You can even say that the recession will be triggered single-handedly by the real estate. Everyone in the country has been suffering because of the rising interest rate in their real estate but the slumping prices when they are put up on sale. When a family or a single person opts to sell their house today, the prices are so low that they end up paying additional money because the original price is way too high compared to the price of most real estate properties today. This has set a rigorous chain of reaction that could lead to recession.

On the other hand, there are people who don’t believe that the country would be in a recession. There are practically two reasons why the country could prevent itself from going into recession: the government hand and lower dollars for better trade with other countries. The Federal Reserve after all, has the power to reduce the interest rate so that it could help those who are unable to pay their loans. The government has shelled out money to aid those who are struggling in their real estate properties.

The lowered value of dollars could be conceived a bad situation but it is also seen as a good thing in a different light. Since dollar values are getting lower, other country’s ability to transact business with the US also increases. That means recession could actually be prevented with the help of other countries’ business transaction.

Today, the leanings of most economists are towards recession. However, only time will tell when will that reality happens. Whatever the future situation maybe, it is important not only for large and medium sized business to prepare financially. We should also do our part in preparing for economic recession so that we could preserve our regular way of life even in the face of the country’s economic challenges.