There's no denying that the US economy has slowed sharply since last summer, with growth almost stalling at 0.6 per cent in the first quarter of 2008, but some still maintain it is not suffering a recession.
Headlines differ daily, some exclaiming that a recession is on America's doorstep and others trying to prevent panic and quell fears that the worst is yet to come.
While economic growth is indisputably small, the fact that it is not currently contracting is encouraging some economists to believe that a recession has not hit the US. Other economists argue that the American economy has essentially stalled, and see the weakness that has spread from the housing sector to the wider economy as a sure sign that their country is in a recession.
Corporate bankruptcy is up more than 50 per cent on last year's figures as increasing numbers of businesses fail in the current climate conditions, which have forced consumers to curb their spending.
The credit crisis is squeezing household budgets, stretching them to breaking point in order to meet the rising costs of transport, food, fuel bills
, and mortgage
House prices continue to plummet and, as they continue to do so, it is difficult to gauge how far they will fall and to determine the true extent of potential sub prime mortgage losses. Prospective home buyers are struggling with higher fees and rates; even borrowers with good credit histories are still facing tighter lending conditions and higher repayments.
Bankers and mortgage providers met in Boston, Massachusetts, yesterday to share strategies for weathering the credit storm, and in the hope of spotting indications that the struggling mortgage market is about to turn a corner.
Employment has also contracted for the fourth month in a row, suffering a total loss of 260,000 jobs, but optimists argue that while this is a negative point, the figures are mild compared with those of previous recessions.
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