Economy faces two powerful enemies simultaneously
The recession may be ending -- or it may be heading for a second "dip." After a number of signs that the horrible economic drop of late winter may be ending, including data from the Fed's latest Beige Book, several factors may drag the recovery to the ground.
Oil and gas prices were not expected to rise, at least not as much as they have. Oil was well below $35 last quarter. It is now above $70. Gasoline prices are back near $3 in some parts of the country. The upward trend could certainly damage large industries like airlines and automotive. Rising gas and petrochemical costs will increase the financial pressure on companies that use oil-based commodities or rely on transportation. Tighter margins often mean more lay-offs.