Economic Indicators Do Not Point to Double Dip Recession

By Kyle Chezum Updated on 6/6/2011

 

There has been much talk about the possibility of a double dip recession ever since the economic indicators began to point toward this potentiality around the middle of the current crisis.  During the past week, many of these indicators began to point toward such an outcome once again, as unemployment rose and jobless claims held steady.

But one economic powerhouse, Barclays Capital, believes these indicators do not point toward the possibility of a double dip, and the firm has made its case vehemently.  "The U.S. economy has clearly hit a soft patch, with nearly every data point this week surprising to the downside," the firm concluded.  "We do not see data over the past month as the start of a double-dip but rather as a temporary soft patch."

The capital firm, which focuses primarily on analyzing research outcomes to determine economic impacts, also concluded that consumer spending will pick up again soon so long as energy and fuel costs do not continue to increase.  The firm also offered a counter against the latest Standard & Poor's / Case-Shiller housing index findings, which offered a bleak outlook for the housing sector recovery.

With regard to mortgages, Barclays Capital stated that mortgage rates will likely drop below 4.69% due to the lack of refinances on the table.  This could prove to be a major benefit for potential homebuyers, all other factors being equal.