US Economic Trends for 2012

Okay so, what are the economic trends for 2012 here in the United States? Well of course it is an election year, and generally our economy does okay in an election year, however in this particular year the European crisis will also affect our GDP growth slowing us down to 1% or thereabouts. That certainly won't make the current administration look very well, even if the unemployment rates are slowly dropping, at least as per the official version. Okay so let's go and talk about some of these things shall we?

Job growth is slow, and it appears that that will continue, and even if we get a couple of good months, that could all turn around and go the other way after the election, even though historically November is when retail sales start picking up for Christmas, and there is temporary employment, along with the overnight shippers like UPS, FedEx, and now Amazon. Even though our government at the federal level can't seem to stop spending and is running $1 trillion deficit each year, it's doubtful that they will stop spending this year because of the election cycle, which may be good for boosting the economy, or keeping it from slipping back in a recession, but it probably isn't so good long-term.

One wildcard happens to be the issue with Iran and nuclear weapons, and the potential eventuality that the Straits of Hormuz will be blocked, or we will enter a war with Iran. If that happens it will send oil prices to record levels, which means that the gasoline and diesel prices will also increase, that could really hurt our economy, especially the comes during the driving periods of the summer.

It does appear that government tax revenue might be increasing, however at the corporate level our corporations are sitting on hundreds of billions of dollars, which they are not spending. They've already earned that money, and it will not be flowing around the economy, therefore it will not get taxed. Another drag on our economy besides the potential increase in fuel costs is that of education and healthcare. These costs are going through the roof and hurting consumers.

Although the 2011 Christmas season showed strong retail sales, it also showed that consumers were borrowing to make up the difference. The extra income that employees were making, did not go into consumer spending, as much as it went into the bank, indeed most economists believe that those trends will also continue, even if some of that sounds counterintuitive.

2012 does not look like it will be a big year for small business expansion, which unfortunately is definitely something we need right now if we are to get people back to work. These are just some of the trends going on in the US economy right now, but the year has only just begun. Indeed I hope you will please consider all this and think on it.42