It seems that the discussion over whether the United States has finally hit a recession is all but finished. Latest statistics from the US government have shown that a recession is almost certainly imminent.
Job Losses were reported this week – and were much harsher than expected. 63,000 jobs were lost in February alone in the US – a sure sign of economic crisis. This was further exacerbated by the rate of home repossessions – which reached an all time high in February. The sting from the Sub prime mortgage crash is still being felt.
Thats not to mention that fact that oil peaked to its highest ever price per barrel last week – and as investors struggle to protect their loot, the price of gold has skyrocketed – harming floating currency rates, and putting pressure of those states still with adequate gold reserves.
Technically a recession is when an economy sees negative growth for two or more financial quarters – the US has yet to report negative growth in one – but the signs are all there, and consumer confidence has allready taken a big hit.
This has ramifications for New Zealand – John Key recently made a big song and dance about raising food costs, and basic goods. If the United States – the economic hegemony of the west, continues on its downward spiral – Mr Key might have more than just an election side issue on his hands… not to mention a budget deficit if he wins in September…