The Biggest Risks to the U.S. Recovery
A growing number of economists believe that the U.S. economy has pulled free from the grip of the Great Recession, as another strong jobs report came out. They marry this with a string of good consumer confidence figures and an…
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The threats to the recovery usually listing include the ongoing trouble in housing, high gas prices, and a growth of the federal deficit. There are a several beyond that, according to S&P
In a new report entitled “The Top Risks To U.S. Credit And The Economy” the researchers claim that the two top risks to the recovery are “asset bubbles” and “natural catastrophes”. That assessment seems a bit naive as gas prices race toward $4 and WTI crude well above $100. Katrina was a drag on U.S. GDP, but how such an even can be put above high gas prices is incredible.
Next on the list, but considered less of a risk, is sharp residential losses, which is impossible to quarrel with. And, next is geopolitical and social unrest outside the U.S. There has already been a great deal of this in the last several months, particularly in Africa and the Middle East. A by-product of this unrest has been higher oil prices, so from an indicator standpoint, the assessment is fair.
The sovereign debt crisis and contagion from it are another S&P risk. With Greece settled, and some chance of a larger EU bailout fund, this risk seems to have receded. So has one more S&P risk — another U.S. recession.
The often overlooked risks that S&P is right to point out is a drop in China GDP growth to 5% which would hurt U.S. export dollars. The Chines government has repeatedly dropped forecasts, and its PMI has suffered — probably because of the recession in Europe.
Douglas A. McIntyre
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
