It's official US in a recession

[imagine]

Well It has been officially announce the US is an a recession and has been for a year.

http://www.npr.org/templates/story/s...41&ft=1&f=1006

I've heard that they think it is going to be a "longer than normal" recession

Anyone else heard this?

What are your thoughts?

[fixer]

The problem with the definition of a recession is it looks backward. To see that we have two consecutive quarters of negative growth takes close to a year. With the bulk of our economy dependent on consumer spending, it will take while for this recession to end. My question is that if overspending got us into this mess, how can we expect it to get us out. Lowering already low interest rates, giving tax deductions for buying house and cars just promotes to behavior that caused the problem to begin with.

[Greebo]

The problem with the definition of a recession is it looks backward. To see that we have two consecutive quarters of negative growth takes close to a year.

Actually, it takes 6 months.

But we still haven't had 2 consecutive losers - 2Q08 did better than 1Q08 and 1Q08 was still growth - but slow growth.

I saw this report - they aren't using widely accepted definitions of a recession, and oh by the way, NBER isn't "official" - they aren't part of the Government. They're an independent research group.

[imagine]

Actually, it takes 6 months.

But we still haven't had 2 consecutive losers - 2Q08 did better than 1Q08 and 1Q08 was still growth - but slow growth.

I saw this report - they aren't using widely accepted definitions of a recession, and oh by the way, NBER isn't "official" - they aren't part of the Government. They're an independent research group.

Why are all the news outlets saying that it is official then? There seems to be tons on articles saying it's official.

It is so hard to know what is truth.

[Greebo]

Why are all the news outlets saying that it is official then? There seems to be tons on articles saying it's official.

It is so hard to know what is truth.

The news media loves drama but not research or originality. One person comes up with a headline, everyone else copies it. Gloom and doom sells.

Look, I'm not saying we're not potentially into a recession period - but the classic definition is 2 consecutive quarters of a decrease in GDP, and we have not had that. 3Q08 may have been negative (I need to check) but 1 and 2 Q were not, so we have to get THRU December before we can say yes, its actually a recession.

Headlines NOT getting nearly as much attention:
Mortgage applications surge by record http://www.msnbc.msn.com/id/28032242/
Productivity growth higher than expected http://www.msnbc.msn.com/id/28031477/

BOth today.

Neither are *great* stories - but they do illustrate that the sky is still not falling, the world is not coming to an end, and life *is* going to go on. All this gloom and doom prediction by the media does is make people feel hopeless and desperate, which fuels the negative, by leading people to do less, or nothing, or worse, something stupid out of fear.

[fixer]

[QUOTE=Greebo;1056358]Actually, it takes 6 months.

Two quarters is six months. I think the best definition of a recession is your own bank account. I have spent enough time with economists to realize that economics is an inexact science at best and voodoo at worst. Does the big picture change if we are of are not in a recession? Besides there are so many different permutations of numbers that can be looked at that you can get whatever result you are looking for.

[Greebo]

Actually, it takes 6 months.

Two quarters is six months.

Yeah - I know - I was just being snarky in response to your saying "it takes close to a year".

I think the best definition of a recession is your own bank account. I have spent enough time with economists to realize that economics is an inexact science at best and voodoo at worst. Does the big picture change if we are of are not in a recession? Besides there are so many different permutations of numbers that can be looked at that you can get whatever result you are looking for.

I agree completely! Its your personal economics that matter in the long run.

[fixer]

I wish I had been aware of your snarkiness. It would have saved me some serious math trying to figure out the difference in two quarters and six months. Of course, it takes almost another quarter to get the data, revise it, and report it. I think it works this way so by the time we are in an "official recession" it is over. Not this time. But hey, at least I avoided writing "Greenbo".

[imagine]

The news media loves drama but not research or originality. One person comes up with a headline, everyone else copies it. Gloom and doom sells.

Look, I'm not saying we're not potentially into a recession period - but the classic definition is 2 consecutive quarters of a decrease in GDP, and we have not had that. 3Q08 may have been negative (I need to check) but 1 and 2 Q were not, so we have to get THRU December before we can say yes, its actually a recession.

Headlines NOT getting nearly as much attention:
Mortgage applications surge by record http://www.msnbc.msn.com/id/28032242/
Productivity growth higher than expected http://www.msnbc.msn.com/id/28031477/



BOth today.

Neither are *great* stories - but they do illustrate that the sky is still not falling, the world is not coming to an end, and life *is* going to go on. All this gloom and doom prediction by the media does is make people feel hopeless and desperate, which fuels the negative, by leading people to do less, or nothing, or worse, something stupid out of fear.

Okay Greebo,

I went and did some research because I like learning.

Here is a link to definition of recession including the NBER definition. Which is the one the NPR article went off of, right?

http://economics.about.com/cs/busine...epressions.htm

I like this definition/joke

recession is when you neighbor loses his job

depression is when you lose your job

[Greebo]

I can see some validity in the NBER evaluation, but if the standard definition's failing is how long it takes to determine, how come it took NBER till Dec 08 to determine the recession started in Dec 07?

But whether you believe its a recession or not (and I'm not saying its not currently one, I'm just not agreeing that it started when NBER said it did), the bottom line still is really whether or not its *your* economy that's been affected. And as with all things about each person's life, how we deal with the personal economy is first and foremost up to US, as Individuals.

[MomToTwoBoys]

I don't think anyone needed a news story to know it for sure. It must be a slow news week, what with Obama picking people for his cabinet that aren't Bill Clinton/Monica Lewinsky material and all.

I'd rather see something like surging mortgage applications and higher productivity growth in the news than something that we're all known about since early this year. News outlets really need to learn to report things that are helping the economy and would, in turn, help the markets. Part of the market volatility is the fact that they're relying on the news to judge whether stocks are bought and sold.

The news around here lately isn't so much a recession, but it's the Canadian government's inability to stop being a bunch of children and run a government that may or may not face a deficit for 2009 due to the world economy. That's my only concern right now, even though I can't vote.

[imagine]

I can see some validity in the NBER evaluation, but if the standard definition's failing is how long it takes to determine, how come it took NBER till Dec 08 to determine the recession started in Dec 07?

According the to news on the radio the answer to the question was they didn't want the recession to affect the presidential election

the bottom line still is really whether or not its *your* economy that's been affected. And as with all things about each person's life, how we deal with the personal economy is first and foremost up to US, as Individuals.

I agree. Like the joke definition suggests. Here it feels like a recession.

[Greebo]

According the to news on the radio the answer to the question was they didn't want the recession to affect the presidential election

HAHAHAHAHAHAHAH

That's too funny!
What did they think it would help McCain??? *ROFL*