August 2, 2011 will be a day remembered as the day the US almost averted a debt crisis. Congress passed legislation increasing the debt limit to 2.4 trillion dollars (or 24,000 times 1,000,000 for perspective) and agreed to take the next few months and reduce governmental spending. The government simply has to stop spending more than it generates while maintaining the integrity of the services they provide including Social Security and entitlement programs, infrastructure, and national security.
And doing so will be no small task.
A double-dip recession is basically the phenomenon of going into a recession, getting out of that recession for a short period of time, and then slipping back into recession. Experts have claimed a 40% chance of going back into a recession, but there is also a 60% chance we will see continued (albeit small) economic growth.
The growth we have seen over the past several months has been painfully slow, but still producing small economic gains. Going back into a recession would mean losing any ground that has been made up over the past several months.
The debt crisis puts additional strain on job markets, stock markets, and the entire financial institution. If the government's credit rating were downgraded, it could cause interest rates to climb making getting access to capital more difficult and more expensive. This could put a further strain on the job market as companies pull back from being able to expand and reinvest in job-creating initiatives.
Along the same timeline, the US jobs market is also in limbo.
There is a surprising disconnect between employment and workers. Unemployment rates are creeping upwards again close to 10% while online job postings are again at their highest levels ever. More companies are furloughing employees and starting layoffs again, and the future just doesn't seem very bright for the foreseeable future if you just look at the numbers. Between the lines though, there is room for optimism.
What is the average person to do about this?
Get online and search for jobs. There are still companies and industries hiring talented people, and you have to get out there and find them. You may not be the best "fit" but if you don't apply for jobs, you have no chance to win a job. Jobs are more competitive, so you have to market yourself the right way through your resume, phone interviews, and personal contacts. Build the relationship before and during the job vetting process, and you might be surprised to find yourself at the top of the list.
Recessions are felt from the top to the bottom of the economy. Prices tend to be higher, incomes become more stagnant, and opportunities decrease out of fear and negative expectations. Over the past 2 years, consumers have gotten smarter and more price conscious while working to reduce personal debt and lighted the expenses load. For those that follow the pattern of learning from this period of recession, the chances of being negatively affected over the long term are significantly reduced.
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