The US Economy In 2011

The 2011 seems to usher in some good news after the long economic slump. At least that is what the experts have to say. Though not a major economic punch, but the betterment can be felt in ripples.

2011 is probably going to be a mixed of ups and downs. According to most economists, the gross domestic product (GDP) is expected to ascend about 2.5% in 2011, which is below the average 3% GDP and does not look promising enough to create much new job possibilities.

Consumer spending and housing have been the two areas that accounted for recession recoveries in the past. Ironically, these two focal points have bridled the scopes of recovery in the present downturn market. The house prices have been adversely affected by escalating foreclosure rates at present. And the lack of job prospects has radically marked a decrease in consumer spending and shot up consumer debt figures. Most consumers, these days are addressing their debt issues and also looking for ways to settle tax debt.

A steady dip in consumer spending and housing prices indeed has been reflected on the GDP. Nevertheless, the GDP seems to rise, though slowly. For the growth to shoot up rapidly, shoppers need to part with their frugality.

To improve the economy, the Federal Reserve seems all set to put about $1 trillion into the credit market in 2011 in order to stabilize the credit rates. But the experts believe that pumping funds into the market will not be of much help because banks will be anyway skeptical about lending money unless the loan applicant is extremely credit worthy.

While the government’s attempts seem to offer bleak hopes, the corporate field appears promising. Economists opine that the well off corporate firms that have accumulated huge earnings from business might be able to create new job opportunities using their funds. According to the economic analysis, the corporate players are expected to boost their staffing by around the end of 2011.

However, certain internal and external impediments continue to exist. The division in the Congress could make it hard for the policy makers to address questions on economy. And in addition to that, economic slowdown of China could seriously affect the US economy.

Submitted by reader Marc Brown

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