If this is your first time visiting, check out the story behind this blog. Otherwise, please join the others by subscribing to my RSS feed or get updates via email so you don't miss any personal finance articles!

Today’s post is kindly submitted from Steve @ Apex Credit Cards. Apex Credit Cards is a site that provides credit card offers, comparison and reviews.

Your Hard-Earned Dollar in 2008
So, it is well-known that the U.S. economy has been weak for most, if not all of 2007. The housing market slump continues to result in subprime defaults, credit is extremely hard to come by, the dollar is falling against the euro, and oil prices have recently hit an all-time high. What can we expect in 2008? Will next year be any better than 2007? No one can say for certain, however there are some indications here and there that point toward an improved U.S. economy in 2008.

Housing and Credit Market
Home prices throughout the nation are down 4.2%. Some sources are predicting an average home price drop of 5.7% in 2008. If that proves to be the case, the real estate market will be in the worst shape it has been in several decades. As if that isn’t enough, foreclosures are expected to reach the one million mark. Investment banks have been forced to continually make major write-downs on subprime loans in recent months contributing to the downturn in the market. Wall Street suffers not only due to defaults on home loans, but from securities backed by mortgages as well. According to Goldman Sach’s economist Jan Hatzius, the housing market slump is expected to end up costing banks, hedge funds, and other lenders $400 billion. Simply, there is not enough demand to meet the increasing supply of homes on the market, and lenders are forced to make it difficult to qualify for a loan due to the risk of default.

The Falling Dollar and Surging Oil Prices
The dollar continues to fall against the euro. As a matter of fact, the dollar was at $1.45 against the euro last month and is currently at $1.4659. Experts predict that the greenback will continue to fall with no signs of improvement for the near future. So, what’s the good news? U.S. goods are cheaper in foreign countries due to the falling dollar. In return, U.S. exports increase. The economy is much less likely to go into a recession when trade is increasing.

Unfortunately, oil prices continue to rise. In 2007, oil has increased more than forty percent! On Friday, oil prices increased $1.78 reaching $95.21 per barrel. We all know that rising oil prices make it difficult for industries that rely on fuel costs. Airlines, railroads, and the trucking industry are all affected. However, it is necessary to look at its affect on the average consumer. Consumers will continue to get hit hard at the pump, on utility costs, as well as travel costs.

U.S. Economic Outlook for 2008
Believe it or not, as bad as the housing and credit market have been throughout 2007, the GDP rose in the third quarter to a 3.9% annual rate. This is the highest it has been since early 2006 and is 0.8% higher than second quarter results. Also, the job market has not been hit very hard due to the housing market slump unless your work relates directly to the housing industry. Yes, experts expect a slight decrease in employment opportunities; however, salary increases for next year are expected to remain the same as 2007. With this said, it is apparent, up to this point, that the U.S. economy can at least hold up to the strains of the housing and credit market, and avoid a recession.

For those that are interested in buying a home and keeping it for several years, now may be the time. Experts are assuming that 2009 could be the earliest that we could see house prices bounce back. Right now, many homeowners are looking to sell. With sentiment at record negativity, you may be able to come across a great deal.

Yes, the dollar is falling against the euro. However, there are many other places around the world in which the dollar may go a long way. These places include South America, Central America, Eastern Europe, and even Asia.

According to experts, oil prices should drop in 2008 to $80 per barrel. In the summer of 2008, the price on gas is expected to be around $3.05per gallon. However, that is an improvement over the $3.15 per gallon that drivers were paying in May of this year. Interestingly, oil prices are no longer having a major impact on the U.S. economy like they were years ago. Our surging oil prices of today are comparable to those of the early 1980s. Back then the economy took a big hit. Today, as compared to the early 80s, we are much more energy efficient.