5 Numbers That Could Rattle the Recovery
A lagging housing market and rising fuel prices are adding to worries about the economy
April 15, 2011
It's no wonder that our confidence in the economy is at an all-time low.
"Americans have been bombarded by new worries in recent days with the war in
What should we brace for next? Here are some numbers worrying economists and Americans alike:
That's the national debt, and it's growing at a breakneck speed of
Higher interest rates aren't the only potential side effect of Uncle Sam's borrowing binge. Consumers could also see a weaker job market, higher taxes, and higher inflation down the road.
Average fuel prices, currently hovering around
Higher gas prices put pressure on consumer discretionary spending. If Americans have to spend more to fill up at the pump, they'll have less to spend in stores, restaurants, and other consumption-driven industries that power the U.S. economy.
The price of crude oil directly relates to gas-price fluctuations. "Estimates are that for every
That might seem like a tiny figure, but an economy growing at a sluggish rate of about 3 percent doesn't leave a large margin of safety, he says. "[0.2 percent is] not consequential enough to say 'Well, therefore, the economy is going to roll back into recession,'" Luschini says. But sustained price elevation or prices near the
The national unemployment rate is slowly creeping down, but at 8.8 percent -- a 27-year high -- it's still creating significant drag on the economic recovery. Even grimmer is the percentage of Americans who are "underemployed," Luschini says.
Underemployment, which measures the number of part-time workers looking for full-time work, sat at about 19.9 percent in mid-March, according to a recent Gallup poll, nearly identical to the figure a year ago. Although more positive economic data may buoy job seekers' confidence in the long term, the short term is a different story. "What it means is that we're not getting the strength from consumer spending that you would normally expect to see under a swifter recovery in employment," Luschini says.
Historically, a resurgent housing market has been a major driver in broader economic recoveries. That premise has been challenged this time around as median home prices -- currently
The downward spiral of home prices seems to have slowed somewhat, says
Despite news of rising prices in nearly every other part of the world, at 2.1 percent, inflation in
"The threat is more directional," Luschini says. "It's that we've gone from concerns of deflation to now experiencing some minor month-over-month increases in inflation, which while still low, from an observation standpoint are threatening to become something more untoward. It's setting up for the prospects of inflation becoming problematic."
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