Recession Fears Recede as Economy Grows 2.5%” Even though the U. S. economy has picked up recently, the level of growth is not enough to make inroads into the incredibly high national unemployment rate of 9.1%. One thing pointing to this is the fact that more and more Americans are spending rather than saving. This will inevitably prolong the current high unemployment rate because jobs need to be created to provide for the unemployed. Business spending has increased, although this may only be a short term measure. Many business owners are expected the economy to slip back into a recession some time during the next 12 months and are thus taking advantage of the relatively stable economy at present.
Earlier this year, the U. S. economy did not sustain growth of close to 3%, and the current trend may not solve the problem in the long term. Consumer spending is up from earlier this year, as is fixed investment by business. This all sounds good, but when it is compared to less saving by Americans, it does not make pretty reading.
The current trend may only be considered a blip rather than a significant upward turn. The fundamentals of the economy do not show signs of any long term growth, and this fact leaves both businesses and consumers scared as we head into 2012.