United States Recession Threats Not Black and White

A recent report reveals that some parts of the U.S. economy are approaching crisis levels while others are cloaked in "shades of gray."

Contradiction is the norm in the country's economy. United States commuters have practically experienced a tax break when oil prices plummeted to their lowest levels in years, and yet they are unwilling to loosen up their purses.

Home mortgages are now available at near-zero interest rates which made homes very affordable to home buyers, and yet, the rate last year of national home ownership has dived down to its lowest level since the 1960s.

In early February, there were questions if the U.S. economy is headed towards recession. Since the start of this year, stocks in the United States peaked and plunged alternately like a roller-coaster. Sometimes stock prices are ready to shoot up, and then they suddenly dive down in a panicky manner.

However, this time is different from the recession in 2007 - 2008, when underlying economic weaknesses and reckless financial practices drove the country's economy into a recessionary precipice.

This time, those who are in control of the situation are fearful traders. Over the past couple of weeks, the Dow Jones industrial average has swung back and forth in daily trading by hundreds of points.

With all these instability, amidst a weakening international economic scenario, together with several unemployment and payroll metrics that make it appear that the country is in good shape economically, monetary policy officials, financial analysts and consumers all over the country are beginning to scratch their heads in disbelief and confusion.

They are at a loss in trying to guess which of these factors will finally break the camel's back.

"It is important not to fall in the trap of extreme views in times of doubt. Indeed, reality often lies in the fifty shades of gray between black and white," wrote Gregory Daco, the head of U.S. macroeconomics at Oxford Economics, in a report published Tuesday.

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United States, US Economy
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