US Economy Back On Track?
July 30, 2007
The US economy has shown some signs of recovery over the last few days, with falling oil prices and rising economic growth.
Some experts are predicting that global economic factors, combined with an apparent turnaround in the fortunes of the US economy could lead to prosperity quicker than many had hoped.
The news comes just days after figures have shown the US economy has grown beyond the 3.2% forecast, at 3.4% suggesting a turn in the misfortunes the economy has seen over the last year.
Many have taken this as an indicator of an improving economic climate, which has been praised by President Bush as ‘resilient’ in the face of wider macro-economic problems.
The crisis in mortgage lending amongst the sub-prime market, which provides finance to those with poor credit histories, has seen a catastrophic downturn in US housing, and power problems at oil refineries nationwide have led to spiraling gasoline and fuel prices over recent months, bogging down the economy and creating sluggish growth.
However, with growth exceeding expectations, and fuel prices plummeting, it appears that the US economy may have left its worst patch behind.
Over the last few weeks, the US has also improved in manufacturing exports, and consumer spending has shown signs of growth. Additionally, high oil prices resulting in an increase in the trade deficit look soon to be a thing of the past as Iran and OPEC have both hinted towards stepping up production over the coming months.
Experts have warned, however, that increasing economic prosperity may lead to inflationary pressures, and that is important to avoid complacency.
Many analyst forecasts suggest that despite the housing market crisis, the US economy could be well back on track within the year, provided Wall Street confidence remains high and the economy avoids further disasters like that in the housing sector.