The State of US Economy

There are clear indications that the US economy is in double dip recession or probably even in a U-shaped recession. Recession by definition means negative GDP growth for two consecutive quarters. Per most of the analyst, GDP growth turned positive since Q1 of 2010. However I don’t like this definition of recession, unemployment in US is still hovering around the 10% mark, small business are hurting since banks are not lending and house prices in most of the US are flat or still dropping.

Historically stock market has been a predictor of where economy is heading but we are in unprecedented times and current stock market moves are due to demand and supply and panic reasons and not due to fundamentals.

The house prices in US need to start rising and the US economy needs to add atleast 200k jobs every month to start chugging at a good pace, we are far from that happening! My advise if to be cautious and have a safety nest for near future.