• Lisa Simpson
• Jul 22,2010
• In: Foreclosure

There are Signs of Revival in the US Economy

The real estate crisis in the US has eased. The automotive industry has also come out of the slump. This is expected to reduce unemployment. The signs of revival of the economy are also apparent from the decreasing foreclosures. This has been revealed in a monthly review of economic stress in more than 3,000 counties.

The Associated Press’ Economic Stress Index revealed that unemployment has decreased in regions where the automotive plants showed stirrings of life. Many plants restarted production two months ago. At the same time, foreclosure levels slowed down in many areas including the Sun Belt. Bankruptcy rates, which are slower in responding to economic changes, however, rose.

The stress score also showed a dip in most counties. In June, the figure stood at 10.6 while in July, this was 10.54. Lat year, around the same time, the figure was 6.94.

The Stress score is calculated on the basis of a county’s unemployment levels, bankruptcy and foreclosure rates. A higher score indicates a greater economic stress. Under the general rule of the thumb, a region is stressed when the score is more than 11. It may be noted that two months ago, 41 per cent of the counties had stress scores of above 11. Ditto was in June. In 2008, only 7.3 per cent of the counties had scores above 11.

Experts noted that the counties that showed a marked improvement is stress scores are the ones where automotive-related manufacturers had their presence. At least in five of those counties, the lifestyles of 25,000 residents had shown a marked improvement. These are Miami and Howard in Indiana, Warren and Giles in Tennessee and Tuscaloosa in Ala. The automobile manufacturers resumed operations in many of these counties to refill depleted stock. General Motors and Chrysler restructured their board and opened factories.

The automotive industry seems to have benefited from the Federal government’s Cash for Clunkers program. As a part of this program, rebates of $4,500 were provided to consumers who gave up older cars for newer models. This provided the much-needed boost to auto sales that jumped up by 30 per cent in August.  Toyota and other foreign companies boosted production because of this. What’s more interesting, GM is calling back at least 1300 of the workers who were laid off earlier. Even Ford plans to increase production by at least 33 per cent in the last quarter as compared to 2008.

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