The Economic Meltdown! -- What should we do? (Part 1)

I apologize for keeping you waiting so long. I know some of you visit my blog to check on my new post regularly. But there is no update for a month. This is terrible! Anyway, I am back now and today I am going to talk about a HOT issue… (I am wearing my economist’s hat today.) :)

As you’ve known, the U.S.has been going towards an economic recession. There have been large layoffs across the board, from auto industry, airline industry to financial industry. According to the Labor Dept’s recent unemployment report released in September, unemployment rate increased to 6.1%, the highest level since 2003, 1.3% higher relative to the rate in February, and it is expected to keep on rising.

Housing market is in bad shape and continues to worsen. Housing inventory has incessantly gone up while the price has decreased. However, a lot of people still can’t afford a house because of not having high credit scores, the credit crunch and the credit freeze. Current foreclosure rate is high (one in every 538 U.S. households were in some stage of foreclosure). At the same time, stock prices have been falling with violent swings. U.S. stocks plunged the most since the crash of 1987.

Due to uncertainty, many companies and businesses try to survive and come up with a strategy and an action plan to cope with the economic meltdown. One of the strategies is to reduce an expense by downsizing the company. As well as other companies, the president of my company just announced the new business plan. 17% of total positions got eliminated last week. It’s very stressful and painful situation for everybody.

The recession is predicted to last about 2 years or so. However, I think it might carry on longer, depending on our new U.S. President’s policies and other internal and external factors. Things don’t look good right now and I expect them to get worse.

I went grocery shopping last week and found the prices of many products have already been raised. For example, I used to spend $2.25 for my favorite TV dinner. Now I pay $2.99. Also, I paid $15.99 for a bag of frozen salmon. Now I pay $21. Surprise! Surprise! Looks like I have to find cheaper food to eat on my next grocery trip. How about you? What do you think about the current economic crisis?

Have you had any plan to deal with the economic downturn? Have you asked yourself about what you can do to spend less and save more during this time? What do you need to do to survive in case you or your significant other gets laid off?