If you are not yet sick of the word “recession,” then you have probably been living under a rock. It seems like talk of the seemingly never-ending “great recession” has been everywhere. You see it in TV commercials, you hear about it at work, and you probably at least know someone who has been directly affected by it. However, recent studies by several experts and news outlets are beginning to suggest that the worst of the recession might already be over.
There are several factors that contribute to these recent reports, but do not get too excited just yet. It is still far too early to tell if the economy is improving. Additionally, even if the U.S. economy is on the rebound, it may very likely not be back to what we consider "normal" until as late as the end of 2010, or even later.
Rising Home Sales
One of the first signs that our economy was suffering was the burst of the real estate bubble a few years ago. Since then, home values have been on a consistent decline. However, things are finally beginning to look good for the real estate industry. Between huge federal credits and record low prices, home sales are finally beginning to pickup. In the month of April, 17 different states across the country reported increase in purchases. Although sales did pick up, the nationwide average house price dropped further to only $169,000.
Many experts are predicting that we are finally seeing the bottom of the real estate burst. In fact, nearly 1 out of every 10 cities in the country actually reported an increase in home value. It may seem low, but it’s definitely a start.
Consumer Confidence
U.S. consumer confidence was at an all time low in November of 2008 due to job losses and the country’s poor economy. However, it has been slowly increasing since. In April 2009, the consumer sentiment index rose to 61.9 according to Reuters. This was up from 57.3 just one-month prior. Do not get too excited though, some experts are claiming the reports have been inflated by consumers receiving their tax refunds and families preparing for the summer.
Unemployment Rates
Earlier this month a great new report came out showing that the number of job losses last month was the lowest it had been in over 6 months. This was partially due to the huge number of government jobs that were created, as well as new tax breaks for businesses. Although the forecast for the rest of the year is not clear, any decline in job losses is definitely a step in the right direction.
Stock Market
The stock market is always considered a great economic indicator, and although there have been a lot of drops over the past 6 months, things are finally beginning to settle down. In April, the stock market actually saw the biggest growth it has had in over 9 years. Additionally, stocks rose again by around 2% in the first weeks of May.
Oil Rebounds
With more and more people looking for ways to save money, oil prices had been consistently dropping over the past year. However, in recent weeks oil prices have begun to rise again. A recent CNN study claims that the national average price of gas has increased by over 12% during the last month. Although no one wants to pay more at the pump, this is actually a good thing. Since gas is traded on a global market, the price increase shows that the world economy is also beginning to recover.
Less Pending Construction
Construction projects all over the country have been put on hold as local governments struggle to generate enough revenue. However, reports show that many cities are getting back on their feet thanks to recent tax changes and stimulus money. This creates jobs, which in turn creates more revenue, and helps the economy in general.
Lending and Loans
One of the reasons the economy has been improving lately is because of the change in lending policies. For a while it was nearly impossible for first-time homebuyers to purchase a home, between long approval processes, and difficult-to-negotiate bank properties. However, more banks are easing up on their lending policies and families are finally beginning to purchase houses again.
