US Recession Coming Very Soon

As the housing market continues to decline and the consumer spending falls it will have serious ramifications for the overall US economy. These two factors combined with other factors will almost certainly to cause a recession in the US starting in late 2006 or early 2007.

The preliminary 3Q 2006 US GDP growth was a lousy 1.6% compared to a 2.6% for the 2Q. That is a very strong drop in the growth of the GDP. Nouriel Roubini, an economist with Roubini Global Economics, writes

The first leading indicators of economic activity for October -– the Philly, Richmond and Chicago Fed reports -– are all consistent with a further economic slowdown in Q4 relative to Q3. I thus keep my forecast that Q4 growth will be between 0% and 1% and that the economy will enter into an outright recession by Q1 of 2007 or, at the latest, Q2.

Here are other factors that will contribute to the upcoming recession:

• Federal Debt & Deficit
• Continuing Housing Bust
• High Consumer Debt
• Large Trade Deficit
• Continued Offshoring
• Security Costs

Billionaire speculator George Soros said he did not expect the United States to fall into recession in 2006 - but he does the following year.

For the past 4 years the US economic 'recovery' has been too dependent on a mountain of debt. It was simply unsustainablele. The housing boom of last year is now a bust. The convergence of the housing bust with other significant economic factors will almost certainly put the US into a recession by late 2006 or early 2007.