Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Saturday, December 6, 2008

How to Spot the Signs of a Recovery from Economic Recession

People asked me when the economic and financial market will recover. I know it will and but it may not be soon. Here's an article that offers some telling signs of a recovery: for our reading pleasure from http://www.ehow.com/

When will the US and global economy recover from this recession? Many people think it won't be for one or two years. How will you know when the recovery has started?

Step1. This is an obvious one: watch the real estate market. Sub-prime lending is what started this recession, and that same market will start showing when recovery is imminent. Homeowners will see their home values start to go up in annual assessments. As the market stabilizes, less houses will be for sale as foreclosed homes are purchased with conforming loans. Watch for a sharp decrease in "For Sale" signs in your neighborhood.

Step2. Gas prices can be a strong indicator of recovery, but perhaps not in the way you think! Gas prices dropped 40 cents or more in September, and the price will continue to go down as the economy weakens. American's "can't afford" gasoline right now--demand has gone down and price has followed. Watch the news and gas prices. Once prices start to rise again, it is a sign the economy is growing stronger because demand for gas (and money to spend on it!) is growing as well. However, there are a lot of other factors that affect the price--bans on sale of crude oil, offshore drilling, international conflicts, etc. Watch for gas prices to rise not as a result of some external unrelated reason.

Step3. This recession started with the credit industry, so it isn't a surprise that it's an area to watch. Credit has tightened alarmingly in recent months, which mirrors our economic situation. Watch for a loosening of credit availability. Bailouts and improvements in the banking industry will eventually lead to the ability to give out more credit under less strict terms. Watch for the appearance of lower rate, more accessible credit in credit cards, mortgages, automobile, and especially unsecured loans. The easier it is to secure credit, the better the economy is doing because people are spending, spending, spending and that pumps money into the economy.

Step4. The unemployment rate is higher than 6%, and has been on the rise as employers can't afford to hire on more employees. The job market and unemployment are key indicators of economic stability. People with jobs spend money and strengthen the economy. Watch for the unemployment rate to drop instead of rise. Jobs will start to become more available as the economy starts to recovers. If the unemployment rate sharply declines, it is a sure sign that recession is coming to a soon end.

Step5. Finally, watch the global economy as the US will most likely mirror what's happening worldwide. When this all started, the US was hit by recession and the world market soon followed. In that same manner, the global economy will recover faster than America since it wasn't hit as hard as the US itself. So, watch for the market in Europe and Asia to recover and the US will be sure to follow.

"Prosperity has and always will return again" - JD Rockefeller

2 comments:

Lisa said...

I didn't realise that couldn't open in IE :(

hmm... i wonder why ...

I think I need to put a note, need to open with Mozila Firefox , or Chrome

Remnant 613 said...

beats me.. dunno..
yep.. good idea..