The depth and severity of the 2007-09 economic recessions in the U.S. and its negative repercussions on the labor market and business growth have altered the lives of millions of Americans and literally put their financial future at stake. Over the past couple of years, Americans have not only seen a continuous sequence of ups and downs in the national economy, but they have also witnessed how these economic instabilities have wreaked havoc on their financial lives and left them skeptical about their country’s ability to restore sustained economic growth.
Slow Economic Recovery
Recently, a number of colossal issues continue to weigh on the country’s growth, including the current sovereign debt crisis that hit the European continent, the sharp economic slowdown that China has just experienced, and the massive surge in bad loans that threatened the Chinese banking system. Although the country is now recovering from possibly one of the most serious recessions in history, the pace of growth has been frustratingly slow and relatively inconsistent. The global economic downturn that has created a significant turbulence in the U.S. financial market makes it harder for the country’s economy to gather momentum and quickly recover from its recessionary woes. Indeed, recent reports reveal that the U.S is still struggling to overcome the economic hardships originating from the financial crisis that plagued the country in the previous years.
While the U.S. economy expanded slightly in the July-September quarter, the rate was not strongly sufficient to fuel the growth of employment and boost the labor market. Recent figures released by the Commerce Department shows that the pace of economic growth increased to a 2 percent annual rate from the 1.3 percent rate in the April-June quarter.
This economic expansion is actually boosted by an increase in consumer and government spending. According to data, total consumer spending grew from 1.5 percent in the second quarter to 2 percent in the July-September quarter. The increased spending on homebuilding and renovations was also an important driving factor of economic growth in the third quarter. On the other hand, another survey found that consumer confidence rose to its highest levels in five years this month as consumers felt more optimistic about the initial recovery in the housing market, heightening the possibility that consumer spending will pick up again in the next few months.
However, while the latest report showed some improvement, there is no certainty that the U.S. economic growth will expand at a faster pace in the foreseeable future. Joseph Carlson, a corporate economist for AllianceBernstein, said that more jobs and better pay are significantly needed to sustain that growth.