What is a definitive way to know if we are in a recession or not?
Posted by admin
Deke asked:
There seems to be at least three prevalent trains of thought : we’re in a recession, we’re headed towards a recession, or that the worst is behind us.
There seems to be at least three prevalent trains of thought : we’re in a recession, we’re headed towards a recession, or that the worst is behind us.
I realize certain people such as Ben Bernanke have likely avoided using the term, for fear of how it would affect the market (as it did yesterday, when he spoke before Congress), but is there any true, tell-tale sign to know if we are in — or headed toward — a recession?
Floyd
May 14th, 2009 at 7:50 am
As soon as the “liberal” media tells us we are.
May 15th, 2009 at 8:04 am
Two consecutive quarters of negative growth. Since those statistics seem to more often be a surprise to the experts, it would be rather difficult to tell before it happens.
May 16th, 2009 at 12:41 pm
Sorry, but the worst is yet to come. It has to get worse before it gets better, because nothing has yet been done to reduce the nation’s debt. Until the debt is managed the interest will continue to keep your country bankrupt.
America is no different than any family overspending and living beyond their means on credit. Eventually you can’t pay the interest, then you just keep getting in deeper and deeper until you do something drastic, like credit counseling or bankruptcy. Unfortunately credit counseling and bankruptcy are not a national option, so it’s going to take spending restraint and a long slow effort to recover from this financial debackle.
May 16th, 2009 at 5:04 pm
Significant rises in unemployment. Which we have not seen yet. You seem to understand that pronouncements by the Federal Reserve that a recession is coming up are self-fulfilling. But as they say, watch what I do, not what I say. The Federal Reserve has taken and recommended steps intended to head off a recession, so obviously they anticipate one. If they are fully successful, which is unlikely, we would not have one.
Deflation of the scale which is resulting from the subprime mortgage crisis will produce an economic downturn which nothing financial managers or legislation can forestall. Real property assets are worth less, so, in effect, there is less money.
May 16th, 2009 at 11:54 pm
A recession is two consecutive quarters of negative growth. We have had growth in the last two quarters, only very limited growth. No one is really ‘avoiding the term.’ We are not in a recession yet, and most likely won’t be until after the elections. It is not a ’school of thought.’ Just proper use of the term recession.
The ‘business cycle’ you hear so much about has a lot to do with elections. The Fed will hold the economy up before an election, then let it correct itself after the election. If you pay attention it happens before and after every presidential election.
There are many signs to see if we are headed towards a recession–unemployment, consumer confidence, slow down of durable goods. The thing is most of these numbers are ‘boring math problems’ so people just listen to the media rather than reading it for themselves.
The economy is not in the best condition, but it has seen harder times. Most dooms sayers really don’t know. They say the same thing during every recession. After 9/11 it was that we could never fully recover and that was the end. The economy was worse then than it is now, and we had several good boom years in between.