How do we know we're nearing the end of the financial crisis?
There are several signs that we are drawing closer to the end of the financial crisis and many of these signs have to do with our everyday spending. This ranges from an increase in the purchase of consumer electronics, luxury house hold items, and of course the purchases of new houses. As you watch and track consumer spending you find out that a turnaround is soon approaching.
This year's Christmas season was one of the best on record for big box stores. They marked a large increase in sales compared to those made in the last 4 years but what's more significant is the increase in the size of purchases. The average retail shopper spent 150 percent more this holiday season as compared to others in the past. Most of this increase is due to consumer electronics dropping to their lowest prices of the decade. Those shoppers who had put off spending on a new television purchased one this because of better pricing and an ability to secure credit again.
Many banks put a hold on credit lending during the start of the financial crisis. The ability to get a credit card now is much easier than it was three years ago at the beginning of this recession. What this means is that banks have more money to lend since customers are now paying them back for past purchases. This increase in obtaining credit also applies to the business sector where business now can get loans easier then they have in recent years with lower interest rates. This mean that money is flowing more steadily and that people are willing to risk again which improves the housing market.
While this isn't up across the board everywhere, many cities are experience a growth in houses being bought and sold. This is in part because banks aren't afraid to lend money again to first time home buyers and that properties are now being built to accommodate this market. As this market expands new homes are being built in areas and this increases the incomes of not just construction workers but for construction companies. This increases to the money being spent in the United States and begins to stimulate the market again. This coincides with the purchase of new vehicles by households.
The American auto industry was hit hard by the economic down turn but is now beginning to bounce back. Car sales by American manufacturers are up 15 percent and are continuing to climb. Hopefully this will encourage American automobile makers to bring production facilities back to the United States. As this happens and more people become employed this will lead to positive economic growth through an increase in employment. These are all positive signs that we are slowly leading out of the recession.
This burst in economic growth is a sign that we are slowly moving out of the recession and back into a stable market. As markets stabilize and jobs become readily available more people will purchase more thus boosting the economy as a whole. If we continue these trends and remember what because the recession then we should be able to avoid another one in the near future.