World economy Slowdown

Recession:

When the Gross Domestic Product (GDP) growth of a nation goes to negative for two or more consecutive quarters it is termed as recession. However, recession can be felt approaching as several preceding quarters would show only an ounce of growth in GDP.

Signs of an economic slowdown:

·Decrease in consumer spending
·Rising unemployment
·Decrease in personal income
·Inflation

US economy Slowdown:

The current world recession is due to US Slowdown. Increasing globalization and economic global connectedness shows that the recession in the US could be felt in the rest of the world. This situation very clearly shows that if US gets cold, other countries economy sneezes.

The current situation in the US is the effect sub-prime home mortgages. Sub-prime mortgages mean high-risk debt offerings to people with poor credit worthiness. This resulted to a downfall in the nations economy as people failed to repay loans. This shook the US economy.