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

Turkey's Erdogan: Women Not Equal to Men

Speaking at conference in Istanbul, President Erdogan says Islam has defined a position for women: motherhood More

Ahead of SAARC Summit, Subdued Expectations

Some regional analysts say distrust between Pakistani, Indian officials has slowed SAARC's progress over the year More

Philippines Leery of Development on Reef Reclamation in S. China Sea

Chinese land reclamation projects in area have been ongoing for years, but new satellite imagery reportedly shows China’s massive construction project 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.
Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Changei
X
November 24, 2014 10:09 PM
Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8048
JPY
USD
118.04
GBP
USD
0.6382
CAD
USD
1.1270
INR
USD
61.892

Rates may not be current.