Another telling indicator of where the economy is going is the declining GDP growth. There is a great article titled ” The Big Picture: Actual GDP: ~0%” describing the still unbelievable 3rd quarter GDP growth of 1.6%. The author points out the lower-than-expected GDP deflator (1.8% instead of the predicted 2.8%) as well as the “surprise” increase in auto sales of 26%. He suggests that 3rd quarter GDP will be revised down to 0% growth.
Many economists are now calling for a recession in the near future. And it’s the bursting of the housing bubble that’s leading the way. Both the loss of home equity loan-financed consumer spending and massive job loss in real estate-related fields will exacerbate the slowdown.
Home prices will take an even greater hit with the income loss from employment declines in real estate-related fields.
