No Double-Dip Déjà Vu Seen for US Economy

Kimberly Watson, Editor in Chief
April 24, 2012 /

Various reports show that although the economic situation appears similar to that of last year, there are significant differences. Some sources view an improving economy growing 3 % in the fourth quarter, from one year earlier in comparison with 1.6 % last year. It does not appear that America will have the same experience as occurred in 2011.

The balance sheets of households, banks and various organizations show greater strength, with the shocks sustained to the economy of a weaker nature. The philosophy of an improving economy is supported with rising retail sales, more than forecasts and there are signs of decreasing gasoline prices, from increases seen earlier in the year.

According to the American Bankers Association in Washington; for the first time in eight years, the number of delinquent consumer loans has fallen in the fourth quarter across the board. Based on data from the Federal Reserve, the ratio of liquid assets to short-term liabilities is the highest since 1954.

Although there is optimism from some quarters regarding an improving economy and that it may at last be establishing a firmer foundation; It is still too early for a conclusion that the crisis is over, as defined by the labor-market release in March. Positive indications are that consumers are gradually increasing their spending. Many have finished planned de-leveraging on credit cards and automobile loans.

A general perception seems to show that the improving economy is more broad-based in the United States. It is visible throughout industries and geographically, with the risk factor regarded as being lower. External factors that were contributory last year are far less severe in 2012. Since December 31, gasoline prices have risen approximately 20%, in comparison to about 30% during the first four months of 2011.

 

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