A great chunk of the economic growth can be attributed to

the rise in home and car sales. Government stimulus programs are most likely responsible for this upturn. Cash for Clunkers and Home Buyer Tax Credits for first time home buyers were definitely taken advantage of. While the Cash for Clunker program has ended, the Homebuyer Tax Credit has been extended and now includes a credit for all home buyers’ not just first time buyers. Analysts however are predicting a drop in home sales over the winter months.

The major concern is still unemployment. The unemployment rate is still over 10% and does not show any signs of decreasing. In fact, many analysts predict the unemployment rate will rise to above 11% sometime next year. Even with numbers showing economic growth, experts say the rate is not high enough yet to convince companies to hire.

With the economy’s upward turn, US consumer confidence is slightly on the rise. Many people are being cautiously optimistic. Still, many consumers say they will not spend more this holiday season. Economists however are hopeful that the rise will continue into the 4th quarter at a rate between 2.5% and 3%.

Perhaps the biggest worry for our economy is the possibility of a double dip recession. Analysts fear that if numbers come in lower than expected in the fourth quarter it could send our economy back into a downward tailspin.

Even without a double dip recession, analysts caution that they expect growth to slow considerably next year. In early 2010 most of the government stimulus money will be used up and it is uncertain whether or not consumers will continue to spend without government incentives. Add to the equation that consumers generally curb their spending after the holidays, numbers could definitely shift downward. Only time will tell whether or not we are truly digging out of the trenches, or if we are just experiencing a small reprieve from the current economic crisis.

US Economy: Slower Recovery Than First Reported was created by and is property of American Consumer News.

The Big Three

The three indices that are among the best to be used to gauge economic recovery are unemployment or underemployment, a volatile stock market, and weak consumer demand at retailers. These three signs continue to point to a poor economy for months to come.

Bright Spots

There are however, some bright areas in which encouragement can be found when looking at the economic picture.

Consumer Attitudes are Up

New home sales moved up in August which continues a five month streak. There are very good buys to be found in the existing housing market also which makes it a prime time to buy if you are in a position to do so.
Also, numbers show that attitudes about the economy are up to their highest point since January of 2008. If you trace the numbers back to that point, you will find that even though the bottom had yet to drop out of the economy, consumers had ominous feelings about their finances and, for good reason. The bailouts on Wall Street were just a few months away and foreclosures were not as high as they were today.
While these bits of good news does not spell recovery by themselves, it does show that people believe that we have reached a bottom and will begin to move upwards soon.

Manufacturers are Ramping Up

Even though orders for durable goods were down in August, hiring has increased for part-time workers as manufacturers gear up for additional demand for products. Inventories have been depleted which is the reason for the ramp up, but following on the heels of a ramp up like this could be a full-fledged recovery in which orders will begin to be seen for durable goods once again.

This adds to the sentiment that is already seen as a positive force moving forward. It appears that families are treading water until things improve. They are doing what they have to just to survive and ride out the financial storm. The best advice is to sit still and watch it unfold before you.

Economic Recovery is Here, But Slow Moving was created by and is property of American Consumer News.

On Saturday, January 24^th, President Obama gave his first radio and Internet address from the White House. He discussed his plan for the $825 billion government spending plan which he believes will put a stop to the current economic downfall and result in a number of benefits including producing better schools, health care insurance coverage for millions of Americans who are unemployed or likely to become unemployed, and lower electricity bills.

With unemployment higher than it’s been in 26 years, he says “… if we do not act boldly and swiftly, a bad situation could become dramatically worse. That is why I proposed the American recovery and reinvestment plan. To immediately job start job creation as well as long term economic growth. I’m pleased to say that both parties in congress are already hard at work on this plan and I hope to sign it into law in less than a month. It’s a plan that will save or create 3 to 4 million jobs over the next few years and one that recognizes both the paradox and promise of this moment. The fact that there are millions of Americans trying to find work even as all around the country there is so much work to be done.”

The plan calls for, among other things:

• doubling the capacity of generating alternative fuels, like wind, solar and biofuels over the next 3 years Tax payers would save $2 billion per year, by making 75% of the federal buildings more energy efficient, while helping the average American family save $350 on their energy bill by weatherizing 2.5 million homes.
• Medical costs will decrease along with improved care through the use of computerized health records within 5 years.
• Health insurance for people in danger of losing their health insurance will be protected.
• 10,000 schools will be renovated and modernized to improve learning opportunities for over 5 million students.
• 7 million more students will benefit from greater investment in Pell Grants, making college more affordable for many families, while 4 million students would receive a $2500 college tax credit.
• Roadways will be repaired and new options for mass transit will be created for millions of Americans.
• Securing 90 major ports, and improving communication for the nation’s law enforcement and public safety officials in the event of emergency.

The president realizes that many American’s are skeptical of this plan, and understands it. It’s why he believes in more transparency than ever before, saying, “Instead of politicians dolling out money behind a veil of secrecy, decisions about where we invest will be made public and informed by independent experts whenever possible. We’ll launch an unprecedented effort to rule out waste, inefficiency and unnecessary spending in our government. And every American will be able to see how and where we spend tax payer dollars by going to a new website called Recovery.gov.”

Despite great optimism for the success of the $825 billion spending plan, Obama cautioned against expecting instant results: “No one policy or program will solve the challenges we face right now, nor will this crisis recede in a short period of time.”

President Obama and the $825 Billion Plan was created by and is property of American Consumer News.