So all this recession business has me kind of depressed. By depressed I mean feeling down or pessimistic not the clinical definition of depression. Times are tuff and I started to wonder just how bad things really are. God Bless The Internet. I did some research to try and put things in perspective. I thought I would share my findings and some opinions to boot.
First off the quick and dirty definition of a recession is 2 or more quarters of negative GDP (gross domestic product). there are more involved measures economists use involving inflation, unemployment and such but most of us don't care about pinpointing the exact week a downturn began so 2 quarters negative GDP is close enough. In case you couldn't guess, yes we hit it the last two quarters of 2008. And no we didn't.
Depending on how you measure GDP (yes there are different ways to count that...lots of them in fact but we will stick with just 2) in current dollars or adjusted dollars, how far negative is a little different. first current dollars. that is what a buck is worth today and that measure has us with one negative quarter so far to the tune of -5.8% On the other hand adjusted dollars (adjusted to year 2000. it's useful for comparing years that are far apart) show us with 2 quarters negative -.5% and -6.2%. That turns out to be 5.2% positive or -3.0% negative for the whole of 2008. Fun huh?
Now for the perspective part. During the great depression of the 1930's, current dollar stats were -12% -16% and -23% for 1930, 31 and 32. Adjusted dollars were -8.6% -6.4% and -13% that is a far way off still from what we are posting today. I will also point out IT LASTED THREE YEARS. That is far longer than the six months we have had so far.
Finally for the opinion portion. It will all turn around come Christmas time. People have short attention spans and will be sick of sitting home saving their money. Christmas will give them the perfect excuse to get back to spending and they will. I could do a bunch of math and throw fancy numbers around to "back up" my opinion but numbers can "prove" just about anything so I won't bother. I will just continue to assert my belief that the U S economy is based almost totally on consumer confidence and things will get better just as soon as we start believing they will.
thats my story and I'm sticking to it.
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