Four Reasons Why a Recession is Likely in Early 2008

A recession was always on the cards since the last boom began in 2003.The million-dollar question was when and how it is going to happen? Here are some reasons why it is likely in early 2008.

Housing slump

Housing market has got another year of very weak sales. It is expected that it will take some more time before prices are settled and after the prices are settled, it is going to be the worst decline in last 30 years..The problems in this sector has made a serious downturn in the overall economy. Also these effects will get worse in the next 3 months, according most of the economists.
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Credit crunch

The sub prime crisis which began in August is showing no signs of letting up. Day by day the crisis is getting spread to the entire banking industry. The last quarter results of the banks were pretty dismal. With the sub prime crisis being the tip of the iceberg, by the end of this year more problems are likely and chances of a full blown recession are getting closer.

Rising oil prices

It's quite a long time since the oil prices have been hovering around $100 a barrel. The more time they stay at that level, chances of recession are more likely. With the winter months coming up the demand are still going to increase and there is no hope of a let off in the Middle East crisis, oil is bound to stay at that level.

Weak job market