Business

Chris Cantell Discusses Business: Index: Weak economy may dodge a recession Radka Konkolova

The economy in the US seems to start its downsizing period, and analysts predict it could lead also to the recession, because there was decrease of the gross domestic product during the last half year. And in the economist dictionary this means recession which can be followed by slump.
But on the other hand, the economy can also begin to get well, because it notices slight increase last month. This was a big surprise almost for everyone, especially for the analysts and economists, who predict slight decrease instead of increase.
There are ten important indicators, which show the economic progress. This month, there were six of them, what is more than a half, which claim that the economy is on its upturn. It is almost invisible, approximately 0,1 per cent, but we can say it increases. And it has probably changed its direction, because economists forecast that it is going to 0,1 per cent decrease.
One of the determinants which show the level of the economy is stock index. We can see on this the interest of shareholders to invest. Value of shares fluctuates depend on many factors, but when their value increases, shareholders wants to keep them. On the other hand, when their value decreases, they want to get rid of them because they mean no profit for the keepers. But there is also another group of people, who purchase such underestimate shares and wait to the time when shares acquire higher value and then the time to sell them comes.
And during this month, index of all Stocks in the US increased. There was noticed upswing up to 0,5 per cent.
This time, there is one advantage for all US people. There are tax rebates, which means, they can keep some money and they can spend them for better living or for fuel or for food, which are the most expensive than they have ever been and everybody supposes that it won't be cheaper. Yes, it is true, everything is going to have its highest price. But not only in America the prices grow up. Europe has got the same problem. Because prices of every or almost every product depends on the oil price which increases every week.
Another determinants of economic efficiency are unemployment rate and unemployment benefits and situation in housing market and others.
More than half the members of National Association for Business Economics claim, that the economy will enter or has already entered the recession. I am not really sure. Yes, there is no or just minimal upswing, but it is still not a recession and it can get better and not lead to the recession, which is not a good period of the economic cycle. But on the other hand, it is true, that during this, the economy is starting to recover and the inefficient production is eliminated, what will lead to upswing again.
Also the retailers can help analysts to detect how the economy works, because they have to release what their revenue has been and then analytics can determine consumers' behaviour.

Also The Federal Reserve has decrease the interest rates for seven times and now it is on the lowest level of 2,0 per cent from the initial 4,75 but it is almost sure, that it won't go down, so they want to do. I think this could be really interesting to watch this situation and later its consequences as well.

by Radka Konkolova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.<br><br><font size=2>These news are original content from young talents around the world and are selected for you by Chris Cantell.</font><br>
edited by Tatiana Kucharikova

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