We are not in the clear yet, economically speaking that is. Economists at Goldman Sachs said this week that the chance of a double-dip recession is between 25-30%.
Foreclosures are up and causing a glut of unsold homes. Unemployment is on the increase. Access to credit is still poor says Mitchell Hochberg of Madden Real Estate Ventures. From FT.com: A precipitous drop in sales of new homes and signs of weakening business investment on Wednesday reinforced rising anxiety about the US economy’s wavering recovery. Growing uncertainty is keeping both buyers and sellers on the sidelines of the housing market and fading government stimulus efforts have washed away demand for new homes.
New home sales fell by 32.4% in July year-on-year to a record low adjusted annual rate of $276,000, commerce department figures showed. Median house prices also fell, declining by 4.8% to $204,000 in July. New home sales fell 12.4% between June and July, missing projections that they would be flat during the month, or even creep higher. The steepest falls were in the north-east and west, where they were down 25.4%.
From Politico:Goldman Sachs sees 8.75% unemployment on Election Day; second recession ‘clearly’ a possibility. Read here: Uh Oh Not Looking Good on Election Day
However, Warren Buffet says it’s “bull” and he sees growth. Investment News quotes Buffet as saying, “I am a huge bull on this country,” Mr. Buffett, Berkshire Hathaway’s chief executive, said last week to those attending the Montana Economic Development Summit. “We will not have a double-dip recession at all,” he said. “I see our businesses coming back almost across the board…I’ve seen sentiment turn sour in the last three months or so, generally in the media…I don’t see that in our businesses…I see we’re employing more people than a month ago, two months ago.”
The billionaire’s outlook contrasts with the views of economists such as Harvard University professor Martin Feldstein and New York University professor Nouriel Roubini, who have said that the odds of another recession may be one in three or higher.