Are We Headed for Another Recession? Signs Point to “Yes”

Despite the Fed and their increasingly unbelievable assurances that there won’t be another economic crisis in the near future, the U.S. seems primed for a recession. While some government officials point to marginally lower unemployment rates and sluggish economic recovery figures, other figures are taking a dive and indicating that all is not well. Dawn J. Bennett and many other financial analysts cite several factors in their conclusion that a recession is in the cards. Here are some of the top signs that we haven’t really recovered:

man running from debt

Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

Countries are Defaulting on Loans

Recently, Puerto Rico defaulted on its first loan and made every indication that it would have to do so again. The governor claimed that the basis of the decision is “not politics, this this is simply math”; the country simply could not afford to pay. And, as Obama has decided not to bail them out, they will likely be facing the consequences of this mounting debt for years to come. They are not the only country to have defaulted, a definite a sign of a weakened global market teetering on the edge of oblivion.

Slow Growth for Countries

The countries that are not actively defaulting are not exactly doing well, either. Many countries like Japan, Canada, and China have experienced significantly slower growth lately, and are not looking likely to recover from it any time soon. All of this points to stunted markets that are not able to bolster confidence or improve – and the bad is simply feeding off of the bad.

Slow Wage Growth in the U.S.

While there has been a technical increase in the sheer number of jobs in the U.S., the quality of those jobs leaves something to be desired. Most of these “growing jobs” are minimum wage, part-time jobs; full-time industry jobs are getting hammered. Suffering companies don’t want to shell out the money it would take to retain experienced or specialized workers, and pay them decent wages with benefits. Meanwhile, many retail companies will hire more people to ensure that shifts are covered, but make sure that as few of them as possible are full time. This all reflects a system in which skill is not valued above money – something that you don’t as often see when times are good.

Adjusted Markets and Bailouts the Only Way that Some Are Getting By

Greece is a good example of this one, as they’ve just taken a bailout in return for a promise to implement some tax increases, budget cuts, and other economic countermeasures. Thus, they’ve avoided defaulting, but for how long? And even if the country manages to keep its head above water, it will only accustom investors to more unhealthy spending habits. According to Dawn Bennett, bailouts and central government interference has led many people to put too much trust in investments that they should have been wary of. This can be a very cyclical problem, and even lead back to recession.

While some are willing to trust that things are looking up, smart people are holding their breath, and waiting for the other proverbial shoe to drop.