America Heading for a Double-Dip Recession?

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With today's unemployment numbers showing the fewest new jobs in eight months, economists wonder if America is sliding back into a second recession.

As the president boasted of a new dawn for Chrysler Thursday in Toledo, Ohio, high gas prices and the sluggish job market have many concerned about the economy.

"The economic data flow has turned more negative. That's largely due to the surge in oil and food prices, declining house prices, and of course the ill-effects of the Japanese quake on our manufacturing sector," explained Mark Zandi, chief economist for Moody's Analytics.

On the past year, gas prices have gone up 39 percent; home prices have gone down 5.1 percent, and consumer confidence has dropped six points in the past six months.

Add to that the May unemployment numbers. Employers added just 54,000 new jobs last month, the fewest in eight months. As a result, the unemployment rate jumped a tenth of a point to 9.1 percent.

Ruthanne Kennedy is one of millions of Americans who desperately wants to work.
    
"I'm mid-life; I'm looking for new employment. I don't have a piece of paper; I don't have a degree," Kennedy said. "I just have tons of experience."

The housing market is now officially in the second half of a double dip recession. Twenty-three percent of all homes with a mortgage are worth less than the loan. 
    
"Now I'm a single mom of five kids, and I don't want them to lose the house," struggling homeowner Donna Reese said.

Meanwhile, the Obama administration, facing a massive federal deficit, insisted a downgrading of America's credit rating will not happen. 

"We're going to avoid a default crisis, and we're going to reach an agreement on our long-term fiscal plan," Treasury Secretary Tim Geithner said.

Failure to strike a deal in Congress on a fiscal plan would be a big disappointment to Wall Street. Stock futures dropped sharply Friday on the unemployment news, more than a hundred points in one minute.

Meanwhile, the president's political rivals argue that what he's doing isn't working. 

"When he took office, the economy was in recession, and he made it worse," GOP presidential candidate Mitt Romney said Thursday, announcing his bid for the White House.

Statements like that are likely grow into a chorus of complaints as the 2012 campaign heats up. 

*Originally broadcast on June 3, 2011.

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