President's Economic Report Unusually Pessimistic

Usually, the annual Economic Report of the President is steadfastly upbeat. Handpicked by the President, the Council of Economic Advisors can usually be relied upon to produce a thoroughly researched, well-written report on how well the Administration's policies are creating a Goldilocks economy.

However, this year even this bastion of positive thinking cannot maintain its optimism. It admits that unemployment will rise above its current rate of 5%, and that the Subprime Mortgage Crisis will cause a decline in personal wealth throughout the economy. Furthermore, it admits that personal income does not keep up with inflation, and that growth in exports has not offset the negative impact of the housing decline.

What It Means to You

Expect a rough six months. When both unemployment and inflation increase, it is a good time to be conservative in your personal spending. Pay off debt, review your budget and look at ways to update your job skills. Although the 2008 Tax Rebate will provide a welcome cash infusion, you probably won't receive your check until late summer...too late to avoid the possible recession that the President's report hints at.

Related Reading

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