Economic woes douse holiday; recovery unlikely till '09

Posted July 4, 2008 5:20 p.m. EDT
Updated July 5, 2008 9:56 a.m. EDT

— Amid a bearish stock market, some experts say the national economy is in recession and do not to expect it to turn around before the end of summer.

Much of those economic woes can be blamed on gas and oil prices. In the past year, the average cost of unleaded gasoline has risen more than $1 to $4.10 a gallon, and oil prices have more than doubled to reach $144.25 a barrel.

Much of those economic woes can be blamed on gas prices – the national average is up more than $1 to $4.10 during this past year – and oil prices – worldwide, they have more than doubled to $144.25 since last year.

Some North Carolinians said on Independence Day, they have been reminded of the United States' dependence on foreign oil.

"Some of the other places that have fireworks are too far to drive," said Dee Liggins, who added that gas prices kept her family in town this holiday weekend.

"It takes half a tank or a quarter of a tank just to go back and forth to some places, so we're trying to find things to do right here in the area," Liggins said.

Along with record-high gas prices, a faltering housing market and the credit crunch have hurt the national economy.

"It's a slow slowdown. It's a slow recession," said Dr. Mike Walden, an economist with North Carolina State University. "It's probably going to persist, clearly through the summer.

"There is some light at the end of the tunnel some economists see toward the end of the year, early 2009," Walden continued.

He said the short-term pain caused by high gas prices could kick off a huge dive in prices.

"Goldman Sachs, for example, is saying oil prices will go to $200 a barrel, but then that will spark such a contraction in demand that they will slide back down to $75 a barrel," Walden said.

With the world's freest economy, America has the fundamentals for a bright future, Walden said.

Liggins' attitude indicates that despite the hardship caused by gas prices, she plans to keep her family trucking through economic troubles.

"We're still going to go out there and have a good time," Liggins said.