No More Denying It
December 2nd, 2008 admin Posted in conservative |
Well, it’s official:
The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .
The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.
The NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began last year.
Employers have trimmed payrolls by 1.2 million jobs in the first 10 months of this year. On Friday, economists are predicting the government will report a loss of another 325,000 jobs for November.
The NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said.
In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.
Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining. That has yet to take place during this recession.
Predictably, the market got spooked and shed 680 points.
They’re not sure how long this recession is going to last. They’re predicted it should reach bottom next quarter, which would bring us close to the post-Carter and mid-Nixon recessions as the longest since the Depression. But until our GDP contracts by 1/3 and a quarter of us are out of work, I’m not prepared to accepted the New Depression moniker. I think the ‘81-’82 comparison is apt. That was caused by a massive hangover from a decade-long inflationary binge. It took a while for us to recover. This recession is being fueled by a ridiculous housing market. It will take us a while to recover. Sane fiscal policy out of Washington will be the first big step.
One point. Just as it took a year to clarify that we are in a recession, it may take a year for us to realize that we’re out of one. Remember that the 1990’s recession ended almost two years before Bill Clinton took office but we didn’t “notice” it until after the election. I can’t explain why but I feel like things are starting to loosen up. We just got offered a mortgage at a ridiculously low rate. The stock market, for its plunge today, has been level for the last couple of months. Home prices actually rose slightly here in Texas. This could be a dead cat bounce. Or it could indicate that we’re leveling off.
If I’m living in cardboard box next year, I guess I’ll know for sure.
by Hal_10000
