U.S Economy to take a Plunge on another Recession?
There are now drafts being made on the G20 Toronto communiqué which aims to lower the deficits, hoping that a back-to-back recession would not happen.
Canada indeed became successful in recovering from the previous recession. However, one of the market watchers said that the recent recovery efforts will not be spoiled especially now that United States is likely to encounter another economic fall down.
According to the president of Hussman Investment Trust, with the signs and evidences that they see today, there is a big chance that the economy of United States will head to another financial challenge. This was the post made by John P. Hussman at the website of their firm which he called as the Recession Warning.
At the same time, John P. Hussman also mentioned that the big warning that another recession is coming is the decline in the ISM Purchasing Managers Index. If it becomes lower than 54, this can be a great indication that another financial crunch is coming soon. However, he also noted that during the 1988, the low growth rate experienced by the ECRI Weekly Leading Index was not in any way connected with any given recession.
To give his conclusion, John P. Hussman said in his post that his concerns regarding the potential problems in the financial market and in the economy of United States in general becomes higher as days goes by. His worries were even more affected because of the current state of the United States economy and its slow recovery from the past recession. With the obvious vulnerability of the economy, another economic recession may happen sooner or later. The current troubles such as the house and business foreclosures and high mortgage delinquency levels may contribute to the unemployment rate which may grow by as much as 12 percent.