It's official: US in a Recession
 

I've been waiting for this announcement for well over a year now. I don't get why they waited so long to announce this when all indications were that we were. It bothers me a considerable amount because, had I known this information at the beginning of the year, maybe I wouldn't have bought property. I would have shifted my savings earlier in the year instead of later once all the banks and industries started crying for bailouts.

I waited patiently for the announcement, only to have them tell me that what I already saw was a recession, only to be told that "It's not that way until it's been made official."

Anyways, now that it is official, anything going to change for you?

Cyn why would you wait for "them" to announce the recession?
You had all the info you needed to arrive at that very conclusion.
That and all the people I think of as "in the know" like Barry Ritholtz (The Big Picture), Bill Fleckenstein, and Calculated Risk have been all over the recession for well over a year.
Where are you getting your financial news and commentary?

The NBER are the one's who officially call a recession. I'm kinda surprised the downturn started as early as Dec 07, but that was the peak and the recession goes until we catch a trough.

:orly:

This is like a senior weatherman at a TV station saying, "It's official: a hurricane has formed in the gulf," to coastal residents as the high winds and flood waters are ripping through their homes.

It's been said that when your neighbor loses his job, it's a recession. When you lose your job...it's a depression.

It's a depression for ol' Bill here. As of the 24th of last month, I lost my job of 12 years.

So...yeah, there are changes here. It's time to dust off and update the ol' resume, and brush up my interview skills. Yay me.

from all over the internet and newpapers.

It isn't so much that it's waiting for them, it is moreso that their announcement has an impact on the markets. I'm sure they purposely waited for this point to make the announcement.

I've always been very conservative in my fiduciary planning and investment strategy. So I don't think that much would have changed for me, but maybe. My decision could have been altered a little, even slightly.

BOR, sorry to hear that. I miss the days of the cradle to grave employment....

sorry to hear that BOR, what work were you in? My sister just got canned on the same date (Oct 24). She worked in the GM Truck plant in Oshawa. Now she's trying to make money by managing her son's (Thrash) rock band. Now that's a niche target.

I'm sure you'll be fine. You're bright and capable, and while things aren't great it's certainly not impossible to find a job.

Recession? It sure seemed like a recession 6 mo ago when I lived in Wausau, Wisconsin. I could not find work anywhere. I applied for every type of job I could. Nothing, no one would hire me. A big problem for me was that I had a young child and was single. The employers didn't want a single parent who would have to call sick to work for themselves as well as when their child was sick. They didn't want to have to work around a parent's child's school schedule... who knows what other reasons. Beside the fact that I worked out of my home, "self-employed", doing child care for nearly 6 years. I didn't seem like they considered that 'work'. Little do they know!

The recession has faded into the background considerably since I moved to the U.P. I have found one seasonal job making Christmas wreaths (which is already done for the season) and other job too. I have other potential jobs, most of which are during school hours. I have had no trouble finding work, at any rate. My mortgage is about 1/3 the cost of rent in our area. Granted I still have utitilites but the combination of actually having steady work again and my housing costs being so much lower... Recession??? What recession? ;)

Honestly I realize it's hard for many people. My parents have it hard, my brother had to move home again, and others that I know are struggling. I think for the majority of us we brought it on ourselves. My grandma always stressed to me to live within HALF my means - meaning - keep my debt down to within half of my income and take what's left to save for a rainy day. Grandma ended up living very comfortably and leaving my grandpa wanting for NOTHING and having plenty to play with. We would do well to regain the mindset of those who lived during the depression. Every three generations we're going to have to learn this again and again. It's a normal cycle.
Things will get better. Hopefully soon.

Man, I sure got screwed on this one when i started to finally search for a job this past 6 months.

I'm a bit envious of those who still have their jobs, and can sympathize with those who lost their's/can't get them.

I keep trying to do the best that I can, searching for jobs everywhere.. but its really rough, and its going to be that way for a while... good way for life to throw off my plans at life eh? :P

The economy is not that bad....Karl Rove and Bill O'Reilly say so.

YouTube - Rove, O'Reilly Blame Media For Hyping Bad Economy

YouTube - Rove, O'Reilly Blame Media For Hyping Bad Economy

Its only a media plot to make Obama look good and Bush look bad.

Since 1797 this country has been in 18 recessions that have averaged about 4 years in duration. We have recessions on average about every 12 years. So far the extent of our current recession is being exaggerated compared to what has happened in the past and normal business cycles.

Ace, do you mean compared to the average? I thought the numbers we've seen would suggest this is worse than average. Is it not?

Everyone has their own standards these days. If we look at GDP growth we are not even officially in a recession. If we look at unemployment, since 1970 to 2007 the rate has averaged about 6%, good times and bad. We are now at 6.7%.

Here is a link to the Bureau of Labor Statistics on unemployment since 1970.

http://www.bls.gov/web/cpseea1.pdf

Whatever standard you use, we can look at it and see.

I just took a look at Industrial Production (listed in the OP supporting the claim of recession), the index average between 1972 and 2007 was 81, we are currently at 76. In 2000-2001 there was a low of 73.6. In 1994-1995 there was a high of 85.1. Here is a link.

http://www.federalreserve.gov/releas...nt/default.htm

Technically, a "recession" is a scaling back of GDP, but this can be misleading. A nation can maintain a strong GDP thank in part to wars and disasters.

An "economic recession," the measure of some economists, look at other numbers such as employment rates (as you have pointed out), retail figures, industry production levels (broken down by sector) [edit: I see a lot of production losses in your link, from last year to this year], and other things. What have been the recent reports on these things in the U.S.? How do they compare historically? It might be too early to tell. Also, how does the historical record compare to such factors as the mortgage and credit crisis and the wars in Iraq and Afghanistan?

I don't dispute the claim we are in a recession. I think economic indicators were trending positively from about late 2001 until late 2006 or early 2007, since they have trended negatively. In my opinion the current negative trend will continue until mid 2009. Something has to make the trend reverse, a change in administration may be enough - so far all of the "bailout" actions have not reversed the trends. when Bush took office, I think his tax cuts prompted a shift in the trends. In Obama's case, perhaps his public works plans will do the trick.
-----Added 10/12/2008 at 04 : 42 : 43-----
I just took a look at Personal Income from the Bureau of Economic Analysis.

BEA : News Release: Personal Income and Outlays, October 2008

We were down -.8% in July but August, September and October were all up.

This is not your average recession.

More than 500,000 jobs lost in November - the worst monthly job loss in 34 years.....and nearly 2 million jobs lost for the year.

As a result, the number of people receiving unemployment benefits is the highest in 15 years and the increasing in continuing claims was the largest jump since 1974.

Retails sales for Nov were one of the worst monthly sales drops in the more than 30 years. The International Council of Shopping Centers said this was the biggest drop since it began tracking data in 1969. Standard & Poor's 500 Retailing Index has declined 35 per cent this year.

No...this is not your average recession.

To more accurately compare the economic factors used measure the economy, we should look at percentages. In absolute terms big numbers in a big economy should be expected compared to small number in a smaller economy, however the percentage change may be the same or in the same range.

In order to answer the point about this not being an average recession we have to form a baseline of what an average recession is.

Just for the record, let's put unemployment into perspective. Here is a chart 1970-2008 from the Bureau of Labor Statistics.

http://data.bls.gov/PDQ/graphics/LNS...9265985381.gif

Also, there are other unemployment indicators, i.e unemployment duration. In November the average duration was 18.8 weeks, in October it was 19.7 weeks. This could mean that we may start to see a shift down the road a bit. The median (or mid-point) in the data is 10 weeks in November it was 10.6 in October, and 10.2 in September.

Headlines sell newspapers, that is about it.

ace....You can use all the voodoo economic mumbo jumbo you want.

If it looks like a duck and quacks like a duck...its a duck...and not your average duck, but the biggest duck in several generations of ducks.

ace--i really don't get your perspective on this---it reads like denial pure and simple.

what's happening is the beginning of a restructuring of the contemporary capitalist system as a whole---so i don't think this is exactly a recession either, but for reasons that are quite the opposite of yours. if anything, the floating of the term recession is a palliative, an assimilation of the structural to the transient.

in a sense, this denial is not surprising as it is the economic outlook that informs your positions consistently that's being pulverized.

but it's absurd to argue that what's going on is a routine business cycle.

What? You think 24 banks failing in one year isn't routine? With more on the horizon for next year. Come on that happens... every 70-80 years or so.

You guys are pretty amusing to me. Here is another tidbit of information, or vodoo economic mumbo jumbo.

http://bp1.blogger.com/_otfwl2zc6Qc/...0/failures.bmp

o i see---now the s & l debacle is part of a normal business cycle?
that's great, ace: what other funny tricks do you have up your sleeve?

Facts mean nothing to a good liberal argument, I got that a long time ago, I see it, I engage it, I know response is pointless to the liberal, perhaps I am in denial on that point. But it is amusing to see how the liberal mind comes up with new a creative ways to avoid facts, logic and reason when it contradicts on of their perceptions of reality.

If you don't get my perspective on this issue, it by your choice. My view is not complicated, there is no hidden agenda, no subterfuge.

I had the same thought....the spike in the late 80s-early 90s -> Reagan's S&L dereg debacle.

The 25+ failures in 2008 is far from a common occurance.

Dude, its a chart to put the issue of bank failures in perspective in response to a post. Bank failures happen, they happened in the past and they will happen in the future. Why is factual data considered "voodoo" or "tricks"? Where does that come from?
-----Added 15/12/2008 at 11 : 21 : 12-----
who said it was? However, given the "financial crisis", we are far from the worst periods in the past 100 years.

ace...."facts" are not without contexts. you cannot simply bite a graph, paste it up without situating it and then congratulate yourself on having established a "factual" basis for your absurd interpretation of the ongoing economic situation.

you are working with factoids, which are less than facts---more arbitrary bits of infotainment.

look at it this way--the self-evidence of your basic claims are counter-intuitive enough that you might consider making a serious argument in favor of them. of course you don't have to do it, any more than i or anyone else has to read any particular thread.
but if you think you're making a claim that might obtain for people who do not inhabit your skull, you might present a more complete case for it.

Why did you post the graphic? It essentially supported what Tully Mars said. Or were you trying to point out that large bank failures tend to occur every forty years, instead of 70-80? Even by that measure, the present unpleasantness is happening a bit too soon and might be more significant given the recent trends toward consolidation (not sure if that's true, it's just a guess).

Facts? You consistently misappropriate facts and then when they are exposed as such you pretend that you were misunderstood. Perhaps you have trouble with facts Re: liberals because you use "facts" in questionable ways (see your plot of yearly bank failures).

Weren't you in the "the fundamentals of the economy are strong" camp?

Yeah that makes sense- the S&L scandal and corruption was just another normal cycle of the US economy. Praise the lord and pass the ammunition! I'm converted. There's nothing to see here, move along folks.

What an asinine argument.

My point is that the bank failures in this country in 2008 are not cause for panic. the data I presented supports my claim. I agree that it is a "tidbit" of information, I even called it a "tidbit" of information. However, there is much more information to support my position, I have no interest in submitting a Phd. style dissertation on this board. The best you will get on a board like this are "tidbits" of information to support basic points. In my experience here, no one really wants to get to deep into any one issue. If you ever do, I am game.

Yes, clearly bank failures haven't been an issue at all...

Some have made the point (not here) that our current economic condition is the worst since the depression. The graphic puts the issue of bank failures in perspective. That is why I posted it, and graphics are worth a 1,000 words.



I consistently "cherry pick" facts when they support my point or when they make a counter-point seem silly. I often look for little challenges to break-up my day. Occationally, I will "cherry pick" a fact and hope it leads to a discussion of contradictory facts, methodology, or interpretation. Usually, people simply respond to me personally.

Yes. I still think our economy is fundamental strong. Want another little "factoid" to support my claim? Well here is one any way:

Bloomberg.com: Economy

Seems that smart money sees something fundamentally strong in the US, don't you agree after reading this?

bank failures havent been an issue.....2 million job lossses this year havent been an issue.....rrecord housing foreclosures and personal bankruptcies havent been an issue...the worse retail sails figures in years havent been an issue.

It all media hype!

Cool. I remember having arguments with my sister when she was 6 and she would do what you just did. She still does it too, she supported Obama.
-----Added 15/12/2008 at 12 : 17 : 07-----
Do you think we are in a depression? Do you think Obama is the only one who can save us?

I think we are in the midst of the worst economic downtown in my 40+ years and beyond...and probably since the Great Depression.

I have confidence that the economy will recover and necessarily be restructured...but certainly not through more Bush/Reagan supply side tax cuts or de-regulation.

I dont believe in saviors, voodoo econonmics or an unchecked, self-regulated free-market.

is what you're trying to argue that this is not the end of capitalism as a whole?
if that's the case, then you're arguing against a straw man.

if the argument is that the present situation is not serious, then the burden of proof really does lay with you. so far, it's not going terribly well. for example, i don't really think folk are singling out bank failures as being THE key index of anything--rather, it is an index amongst others.

the claim regarding "fundamental strength" seems mostly like a liferaft for your worldview on these matters--something that is compelling to you because it helps elements of your neoliberal outlook to not drown in a sea of reality.

personally, i've long thought that neoliberalism was lunacy, so it doesn't bother me at all to watch it sink beneath the surface of the water.

Realistically? This has shaped up to be a global recession, which in itself is a bit of a rarity if you look at all the indicators. All things considered, this could be the worst economic downturn since the Depression.

It will take far more than Obama to ride this out. I think he knows that. I think most reasonable people do too.

So you posted that graphic here to refute a point not made here?

Except you also post cherry picked facts to "refute" claims that people aren't even making in close proximity to claims that people are making so as to suggest that you are attempting to refute claims that people are making. You toss out non sequiturs like they were nuggets of wisdom, and you're not stupid, so another plausible conclusion is that you're being intellectually dishonest. This is why people respond to you personally.

No. That's like looking at someone who hasn't eaten in three weeks and saying "Look, he's breathing, he's got to be strong".

Those people are just trying to find a place to put their money where they won't lose it; that's why they're willing to accept no returns on their investments. Right now, the general belief seems to be that the only good investment is one where there is zero risk. My friends, that's not an economy, we can believe in.

Is this another example of you saying something ridiculous to inspire conversation?
-----Added 15/12/2008 at 12 : 42 : 44-----
What, distill your argument down to its ridiculous essence? Seems like the kind of person who would support Obama-- you know, the kind of person who would see right through the bullshit the RNC was attempting to pass of as political discourse during the last election.

My initial post here, 12, was simply in response to a point made in post 11. My second post, 14 addressed some of the issues presented in an article in the original post. the pattern of my other posts are similar in that they have been in response to issues that have been put on the table. I have not laid out a grand premise on this subject. What has been consistent is the fact that I have presented information that shows the recession (and I stated that I don' t dispute the conclusion that we are in a recession) is not as dire has some make it out to be and that within all of the bad news being reported there are some positive signs and indicators.
-----Added 15/12/2008 at 01 : 34 : 34-----
I agree. If there is one major difference between this US recession and most others in our history is that this recession is in a context of a global recession. And, thinking of Roach's comment this point could be put into the context of the fundamental strength and resiliency of capitalism in a generally. Economic conditions often dictate major political change. When we look at the emergence of China's capitalism or capitalism in Russia the political will to ride-out the global recession will be challenged.
-----Added 15/12/2008 at 01 : 42 : 35-----
No one is obligated to put their money in the US, they do so because they think the US economy is safe and that the US economy is going to be strong enough so that they get their money back with a positive yeild (they certainly expect some form of real return). The reason our government can issue bonds and notes is because of the government's ability to tax our economy, not because the government controls the printing press and can print more money. The bottom-line is that its the economy and the belief in our economy that has allowed our government to borrow. Today, the government pays less to borrow than during most any other time in history. This is a very positive long-term indicator for the economy.

i don't think that capitalism is particularly strong or resiliant, really, particularly not when the inmates are running the asylum as has been the case under neoliberalism. it has periodically been bailed out by states---which are in part safety mechanisms developed alongside capitalism precisely to save it from itself.

this is as much a political as an ideological and economic transition that we are living through: it is going to be very difficult for the americans to navigate it considering that the onus for much of the trouble lay squarely on cowboy capitalism. i think of all the various problems of recognition in your posts, ace, this is the most basic. you insist on trying to separate the economy from other factors, which is quaint. you insist on repeating the self-evident claim that not all sectors of the overall socio-economic regime are equally or simultaneously affected by this---to which the answer is "duh"---but at the same time, this is an evolving situation. if the republican anto-union vendetta ends up scuttling aid to the automobile industry, you'll find it far more difficult to make the pollyanna case that you seem committed to making.