One year after the subprime mortgage crisis surfaced in the United States, it is still impacting the global economy. Soaring prices of oil and other natural resources are also affecting it. The Japanese economy appears to have entered a period of contraction. Policymakers of major economies face the challenge of overcoming the situation.
A sluggish U.S. housing market is contributing to an unsteady U.S. economy as a whole. Although the U.S. economy grew by an annualized 3.3 percent in April-June, July's housing starts — at 965,000 on an annualized basis — was the lowest since March 1991. Wholesale prices in July went up 9.8 percent from a year before, the largest rise in 27 years, influenced by rising costs for energy, automobiles and other products.
The gross domestic product of the 15-member euro-zone economy shrank 0.2 percent in real terms in the April-June quarter from the previous quarter — the first drop since the inauguration of the single European currency in 1999. Weak private consumption in the wake of the U.S. subprime mortgage crisis and inflationary pressure from rising oil and other prices are believed to have hit the euro zone.