Recession - or Not?
Feb/Mar 08
The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) has a slightly different definition. The Bureau defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production," and so forth.
By the former definition, we are not yet in a recession. The GDP continued to grow in the fourth quarter of 2007, albeit by only 0.6 percent, which was down sharply from the 4.9 percent rate of GDP growth recorded in the third quarter of last year. However, the "significant decline" in GDP would meet the NBER's definition of recession, especially since it has been accompanied by a slowdown in worker productivity and increasing worker layoffs.
So which definition should we use - and, more importantly, does it really matter what it's called? Probably not, since just the idea that the economy is heading toward recession is putting enough fear into the hearts of consumers who previously fueled the long-running U.S. economic expansion. I'd go with the NBER definition, which means that we might not know we're in a recession until we're halfway through it.
In fact, according to a recent AP poll, 61 percent of the public believes the country is already in a recession. They don't need any definitions from economic analysts.
It just feels like a recession to them - the housing market is depressed, lenders are tightening up on credit, people are getting laid off from their jobs, and belt-tightening is under way. Unfortunately, this general feeling of gloom and cutting back on spending may actually cause the economy to stall even further as we move through the first quarter of 2008.
As we went to press on this issue, Congress passed a $168 billion stimulus package in an attempt to recharge the slowing economy. It will provide tax rebates to individuals and incentives for businesses. Only time will tell if it will work to shorten - or forestall - a recession, assuming we are already in one - or not.
Project Announcements
Piramal Pharma Solutions Expands Lexington, Kentucky, Operations
10/04/2024
G&H Decoys Plans Corning, Arkansas, Headquarters-Manufacturing Operations
10/04/2024
Britain-Based Ultimate Defense Technologies Establishes Billings, Montana, Operations
10/04/2024
Google Plans Dorchester County, South Carolina, Data Center Operations
10/04/2024
Sirius Analysis Plans Virginia Beach, Virginia, Headquarters
10/04/2024
South Korea-Based ILJIN Plans Auburn, Alabama, Manufacturing Operations
10/04/2024
Most Read
-
Top States for Doing Business in 2024: A Continued Legacy of Excellence
Q3 2024
-
What the Latest EPA PFAS Rule Means for Site Due Diligence
Q3 2024
-
Cold Storage: The Next Big Thing in Industrial Real Estate
Q3 2024
-
2023 Top States for Doing Business Meet the Needs of Site Selectors
Q3 2023
-
The Challenge of Securing Sufficient Electrical Power for Battery Cell Plants
Q3 2024
-
2023's Leading Metro Locations: Hotspots of Economic Growth
Q4 2023
-
Semiconductors’ Fragile Relationship With Water May Be Tested
Q3 2024