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

At International AIDS Conference One Goal, Many Paths

The 12,000 delegates attending 20th International AIDS Conference in Melbourne have vastly different visions about how to eradicate disease More

Disasters May Doom Malaysia’s Flag Carrier

Even before loss of two jets loaded with passengers on international flights, company had been operating in red for three years, accumulating deficit of $1.3 billion More

Afghan Presidential Vote Audit Continues Despite Glitches

Process has been marred by walkouts by representatives of two competing candidates, Abdullah Abdullah and Ashraf Ghani 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.
Nature of Space Exploration Enters New Agei
X
Elizabeth Lee
July 20, 2014 2:36 AM
Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.
Video

Video Diplomatic Crisis Grows Over MH17 Plane Crash

The Malaysia Airlines crash in eastern Ukraine is drawing reaction from leaders around the world. With suspicions growing that a surface-to-air missile shot down the aircraft, there are increasing tensions in the international community over who is to blame. Henry Ridgwell reports for VOA from London.
Video

Video Undocumented Immigrants Face Perilous Journey to US, No Guarantees

Every day, hundreds of undocumented immigrants from Central America attempt the arduous journey through Mexico and turn themselves over to U.S. border patrol -- with the hope that they will not be turned away. But the dangers they face along the way are many, and as Ramon Taylor reports from the Rio Grande Valley in Texas, their fate rests on more than just the reception they get at the US border.
Video

Video Scientists Create Blackest Material Ever

Of all the black things in the universe only the infamous "black holes" are so black that not even a tiny amount of light can bounce back. But scientists have managed to create material almost as black, and it has enormous potential use. VOA’s George Putic has more.
Video

Video Fog Collector Transforming Maasai Water Harvesting in Kenya

The Maasai people of Kenya are known for their cattle-herding, nomadic lifestyle. But it's an existence that depends on access to adequate water for their herds and flocks. Lenny Ruvaga reports for VOA, on a "fog collector."

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.