News / Economy

Economists: Second US Recession, If It Hits, Could Hit Hard

Economists: Second US Recession, If It Hits, Could Hit Hard
Economists: Second US Recession, If It Hits, Could Hit Hard

Multimedia

Some economists are worried that the United States is poised for another recession.  They warn that a so-called "double-dip," if it comes, could be more painful for average Americans than the 2007-2008 recession.  Jobs, incomes, output and industrial production are all weaker now than they were then.  One sector that has been hit especially hard is housing.


Mark Hudson is a real estate agent in Washington, D.C., one of the areas that has been least affected by the housing and construction bust.  He peruses the day’s list of homes for sale.

“We are down about 40 percent from June 2005 to June 2011 in home sales.  That affects every potential area of the economy everywhere and we are, frankly, being close to Washington, in better shape then a lot of the areas of the country," he said.

One of the homes Hudson is currently trying to sell is in a historic district in a suburb of Washington.

He says he’ll sell the house for much less than he would have several years ago.  And that reduced housing prices have a real impact on peoples’ personal wealth.

“If they had sold it a few years ago they would have cleared 'X,' now they are going to clear $100,000 to $150,000 less.  That is money they could use in retirement or for buying a new house or for putting their kids in college, so it absolutely affects their personal wealth,” Hudson said.

Robust home sales and construction can help drive an economic recovery.  But economist Karen Dynan says that probably won’t happen this time around.

“The real issue now is that demand is so weak because people don’t want to buy homes when their income prospects are so weak.  When they are worried that house prices are going to fall further and until we can see that demand rise again we are not going to see home-building rise in a way that is contributing to economic growth,” Dynan said.

Many economists say that fear of the unknown is feeding consumers’ hesitancy.  That fear has rocked global financial markets, following a downgrade of U.S. Treasury debt and a long-running and highly fractious political debate over raising the nation’s debt ceiling.

“Pessimism can be self-fulfilling.  If a consumer wakes up one day and is worried about the future and doesn’t go out and spend, then retailers are going to see weak demand and they are not going to hire as much and income will weaken and that in turn will leader consumers to have even less inclination to spend,” Dynan said.

Hudson says that with his personal income down by more than 50 percent, he’s certainly spending less.  And he’s worried about what’s to come.

“If there’s a recession, I don’t know what I would do because I have cut as much as I could, I believe.  I guess I could do more but it would be difficult.  I have cut as much as I can at this point, so it’s kind of a scary question,” Hudson said.

You May Like

Video On the Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime raids, many feel abandoned by outside world, VOA's Scott Bobb reports More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Gazans in Shelled School Sought Shelteri
X
Scott Bobb
July 30, 2014 8:16 PM
Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video A Summer Camp for All the World

VIDEO: During workshops and social gatherings, the Global Youth Village summer camp encourages young people to cooperate and embrace their differences, while learning to communicate with people from other countries. VOA's Deborah Block has more.
Video

Video From Cantankerous Warlock to Incorruptible Priest, 'Harry Potter' Actor Embraces Diverse Roles

He’s perhaps best known as Mad Eye Moody, the whimsical wizard in the Harry Potter franchise. But character actor Brendan Gleeson's resume includes dozens of films, and he embraces all the characters he inhabits with equal passion. In an interview with VOA’s Penelope Poulou, Gleeson discussed his new drama "Calvary" and his secret to success.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.