Over the last few months there has been an increase in the concern and discussion over a possible double-dip recession, particularly after unemployment reports over the summer showed that the nation was shedding tens of thousands of jobs. However, a key element lacking in the talk of double-dip recessions is what actually caused past recessions – that is, what are the primary reasons an economy slows to the point where its growth contracts for at least two quarters – followed by an analysis of whether those conditions exist in the current economic environment. And judging from a variety of indicators, the potential for a double-dip recession seem small.
In short (and in plain english):
Interest Rates still remain at record lows. Upticks in Interest Rates are usually precursors to Recessions.
Our friends the Banks are still relatively healthy, making money and not writing off as many losses as they once were. There are still a couple-hundred problem Banks, but Bondad thinks the overall trend is heading the right direction.
Commodities, particularly Oil prices, haven't spiked. I'm sure you've noticed that Gas is not cheap like it once was, but we don't seem to be experiencing the large-scale price increases like we did under Dubya. The Price of Oil per barrell is down from the $100 buck it once was at, and seems to be holding steady. Plus, dare I say it, are we getting used to the gouging we're taking at the pump?
Finally, there doesn't seem to be a bubble on the horizon at risk of bursting. We're still feeling the overwhelmingly negative effects of the Housing bubble, but there doesn't seem to be another on the horizon for us to worry about.
