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America Economy in 2008 and 2009
Is America still in recession? Downfall in American economy started in the beginning of 2008 and still going on. It is very hard to predict economy as it can be changed drastically in over period of time. There are several reasons for economic downturn such as changes in consumer spending, change in supply and demand, consumer confidence, nation gross domestic product etc., but no one knows exactly the one reason.
Now more than ever people are spending less and trying to save some money that is also making hard to recover the economy. Consumer spending confidence is way down. Thousands and thousands of people have lost their houses because they can not afford anymore, families are forced to sell their houses, or car to survive in this economy. In the first quarter of 2008, 36 percent of all foreclosures initiated were on prime adjustable-rate mortgages in California. Mark Zandi, chief economist of Moody's Economy.com, says the decline in home prices has slashed $2.5 trillion from household wealth, or about $25,000 per homeowner.
Impact of Economy Downfall
There are several businesses, both large and small that are being impacted by the change in the economy; companies are looking into merging with other just to survive. Recently Bank of America acquired Country Wide and now one of the major financial institutes Merrill Lynch is looking to merge into Bank of America.
According to United States Department of Labor, unemployment rate is continuing to rise and for August monthly data shows 9.7 percent (Economy at a Glance). More and more peoples are applying for unemployment benefits to state unemployment insurance agency. Since the beginning of 2008 millions of jobs have been lost and companies are still looking into lay off more employees. According to my survey with my coworker, friends and families; it seems that very few companies are now hiring people but paying less than half than what they usually use to offer for same position and based on years of work experiences.
Change in Life style due to Economy Downfall
Americans are accustomed to spending in holidays, homes and their personal needs but due to the economic downturn, they are saving money for rainy times. It is quite hard to see families compromising their needs now. Little children are noticing the stress their parent has to suffer. We are not seeing lot of initiative being taken from government to improve the economy.
As human beings, we cannot predict the future but looking at the downturn, I am afraid to say but there may be a huge storm ahead and everyone has to face it. I expected that it would get better by the end of 2008 but now we are at the end of 2009 and no improvement has been seen so far. Housing sectors are still facing down turns; it is sold at the lowest price possible but people are afraid to buy house in this bad economy.
How to survive A Bad Economy
Surviving in bad economy is really tough. I know several people who are looking for job over more than six months and still haven’t found one. Here are few things you can you do to survive in this economy:
Ø Watch your spending – think reality, do not just assume will be get rich overnight and able to pay all your debt.
Ø Try to look to cut down budget for all of your purchase- do some search, there are several options available out there that will help you manage. Shop around or goggle online when making big purchase
Ø Talk to different insurance company for home, car and other insurance to see if you can save money by switching to other insurance company.
Ø Avoid investing in high risk or even moderate stock market. If you have retirement account switch you fund to bond and other less risky fund.
Ø Pay first any high interest debt such as car lone, credit card lone- if you can not pay look into transfer balance to other company. Sometime you can great deal by shopping around.
Ø Refinance house mortgage to lower interest rate.
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