Recession, not Depression?

Im just curious, how does the government not call this a Depression?

(my view from california)

I literally see foreclosure signs everywhere on houses in all sorts of neighborhoods. I see more people waiting for the buses than I ever have. A new In'N'Out is opening and there were people for BLOCKS trying to get a job. (For fast food!) Mervyn's is going out of business, american car makers are in the crap shoot, circuit city is bankrupt. No retailers are hiring for seasonal. I can't remember the last 'vacation' story I heard from anyone. The idea of a "christmas list" is surely extinct. I, myself am a college graduate on food stamps trying to find any kind of job! I am supposed to be building my wealth, retirement, equity!

AND really, its ONLY a Recession???? I really can't imagine what you people out there with children are going through!

This is so depressing to me, when are things going to get better, and when is the government gonna tell it like it is?

There is a definative difference between "Recession" and "Depression".

Yeah, it sure FEELS like a depression. But that isn't how it's determined.

It is a very severe depression, anyone who says otherwise is simply delusional.

The current economic indicators are false because the economy is very fragmented. So there is little of a connection between say, unemployment and the state of a segment of the economy that depends on jobs that have all been to china.

Homes go up 2million dollars on island a but go down 1.5 million dollars on island b will be counted as a gain of 2.5 million, when in fact island b is in severe trouble. Especially when there are only 2 houses on the first island, and 10,000 on the other island. What was it ? 240,000 jobs lost to the economy ?

Homes go up 2million dollars on island a but go down 1.5 million dollars on island b will be counted as a gain of 2.5 million, when in fact island b is in severe trouble. Especially when there are only 2 houses on the first island, and 10,000 on the other island. What was it ? 240,000 jobs lost to the economy ?

Say what?

Can you please elaborate since this doesn't make any business sense at all?

A recession is at least two consecutive quarters of negative GDP growth. We can't officially declare a recession until the data has been collected. A depression is a severe and long recession. Again, we can't declare a depression until after the fact since data needs to be collected.

As of recently, we can finally say that we are in a recession - we just had our second consecutive quarter of negative GDP growth. Anything prior to that is speculation at best. The same goes for a depression - it's just speculation as to whether we will get their.

There is a LOT more to the points you mentioned, but I'll comment on two...

I literally see foreclosure signs everywhere on houses in all sorts of neighborhoods.

Yes, that's everywhere, but many people owned homes which were definitely not qualified to own homes. The Clinton administration passed policy to stimulate home ownership. Fast forward a decade, some greedy middlemen in between, and here we stand with housing. It was a bubble just waiting to burst. There is a LOT more to this than what I just wrote as well.

american car makers are in the crap shoot

Much of this is their own doing. American car makers were never able to compete against foreign firms that mastered the art of producing very efficient vehicles at low cost. Gas was cheap for us and SUV's & trucks sold, so we ran with it. The profits were huge. Now the party is over and these companies have nothing - their products are junk. Foreign auto manufacturers are not looking for a bailout. They have good products, and they're built at a low cost.

You're other comments can be examined as well. I gotta stop, or else I'll write up a paper.

Yes, I agree, these are not easy times, but a lot of what happened had forces at work for many years - this didn't just happen. Look at what you do have in your life - make a gratitude list. Work with the hand that you were dealt. Adjust your attitude. Sure, some things are not in your favor right now, heck maybe it's many things, but control what you can control. Vent if you need to, but work with what you can work with.

And trust me, this is not THAT bad. I've been to some third world countries and witnessed how some people live. A recession in the States is still paradise compared to some nations in this world.

My last post wasn't the most helpful but that is how I feel about the issue. I think it is all a lot worse than people are making out.

Want to know how the economy is going ? .. you take a walk down the street.

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There are many different ways to define a recession. Two q's of negative growth is only one measure.

As for the rest of it, you should see not how bad it is in the third world (because those are not developed countries) but how GOOD people in other parts of the world have life.

I'll probably get called anti American for this statement which is not fair because I am anything but anti American but I firmly believe that things will not get much better within the next 10-20 years unless something very drastic happens. There is just too much in the way of reform. Also consider that was is 'good' is wildly up for debate.

I'm no academic but I have done a lot of reading into the American economy. I just want you to consider that there is a very big world outside of the USA and a lot of developed countries that have a much higher standard of living. The best thing I could suggest for you or anyone else to do in your situation would be to put all efforts into finding a way to immigrate to another English speaking country if you can. .Somewhere in the UK preferably. I know that might be difficult but honestly, I think it would be the best move.

I may be just lucky, but I am a college grad in California and I have plenty of work. Like I said, probably lucky. The foreclosure signs and businesses going out of business is so true. I pick up some nice things at Mervyn't closeout sale last night! They are liquidating everything! I will probably go Xmas shopping there. The want ads in the L.A. Times used to take up three to four pages, now it is down to 1/2 a page. Something's going on allright. As far as American cars go, when you build an inferior product, people won't buy them. That part I understand. The businesses going bankrupt and all the people out of work, those things are unusual out here. There have always been lots of jobs in this area, even for people without any college educations. I wonder how long it will take until this nation recovers. Everyone chants "Obama" but we shouldn't hold out too much hope for that. One man can't reverse this, the whole nation is going to have to make some sacrifices. For starters a lot of social programs need to be scaled back as we middle class people are taxed enough, wages need to be frozen, and jobs need to be created. All of this will take time and cooperation. Everyone is going to have to take a bit of this turd sandwhich, everyone.

It's all so discouraging and it doesn't look like it's going to end anytime soon. I just found this article and it basically says that getting a retail job is now harder than getting in to an Ivy league university. Yes, something is REALLY wrong with the times if people are being turned away from minimum wage jobs.

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The present economic downturn is nowhere near a depression. In the last quarter, the US economy shrank by 0.3% (annual equivalent rate), following growth of 2.8% in the quarter before. In other words, it isn't even yet a recession by the popular two-consecutive-quarters measure, although it certainly will be when the next figures come out. It is not yet, however, even close to having an overall annual economic shrinkage.

Compare to the Great Depression shrinkage of GDP of 33% over four years (1929-1933), or the depression of 1937-1938 (shrinkage of 18% in just one year), and you can see the immense difference.

I'm not making light of the problems many people are facing by any means, but we do need some perspective and real factual basis here.

The present economic downturn is nowhere near a depression. In the last quarter, the US economy shrank by 0.3% (annual equivalent rate), following growth of 2.8% in the quarter before. In other words, it isn't even yet a recession by the popular two-consecutive-quarters measure, although it certainly will be when the next figures come out. It is not yet, however, even close to having an overall annual economic shrinkage.

 

Compare to the Great Depression shrinkage of GDP of 33% over four years (1929-1933), or the depression of 1937-1938 (shrinkage of 18% in just one year), and you can see the immense difference.

 

I'm not making light of the problems many people are facing by any means, but we do need some perspective and real factual basis here.

This is a very thoughtful and well-written post, but it should be mentioned that this is the greatest financial crisis in MODERN times. I don't think many people whose lives are being turned upside down are concerned with the exact classification of whether it is or isn't a recession/depression. Most people weren't even alive during the true depressions of the 20's and 30's, so for modern America, Europe and beyond this is as close as we've probably come. The frightening thing is that it is still in it's early stages according to some financial analysts.

CNN reported about a week or two ago that we're in a world wide recession, we've had them before and they last about 18 months. We're in about month 6-8 of it. The last one was right after 9/11. The stock market crashed and everything.

I guess what I mean, is while THE FACTS don't necessarily add up to a depression... Id say the majority of America is severely depressed by these economic times. I don't know anyone who is 'happy' anymore? This is definitely a depression, if not by economic 'facts', but definitely by America as an emotional whole.

It is really difficult finding a retail job. I'll give you my story. I worked at Sears for 4 years. Usually they hire like crazy for the holidays. So after months of not being able to find a job, i went to sears to get seasonal work. Well, they turned me away. Me, with 4 years of selling, merchandising, cashiering experience was turned away. They are not hiring for seasonal. It was crazy to me. And to see the long line for In N Out! These are some crappy times.

I understand 'work with what you got'. But some people don't have anything right now. A lot of my friends who just graduated are in huge debt and can't even find a call center job to get by. I think the CA unemployment rate is up to almost 8% right now? that is ridiculous!

Call it what you will, but this is a depression.

Then your contention becomes a stereotype or generalization. Why classify it as an emotional depressives paradigm for everyone? There are plenty of positive folk in this economic environment that understand the economic facts and yet are not considering this event a depression. Your world view is yours and by reason can't gauge the emotionality of the American experience.

Econ 101 teaches how our fiat currency and market dynamics have some psychological influence; in contrast, this recession is partly the result of the financial overwhelming need of most people to spend beyond their means, aka addiction to spending. You see that letting this recession control your emotional well being is not conducive towards the acknowledgement that life has ups and downs that are better challenged with a positive attitude.

Edit: In reference to your "In-N-Out" example, this burger stand has a reputation of paying high starting wages for their industry; thereforee, all these applicants are folks that want to work for an honest company that believes in taking care of their employees.

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fortunate one, you may want to read this article. This explains somewhat of what im talking about. It is very hard for educated, experienced individuals to find minimum wage retail jobs.

And yes, I took Econ 101 too. And I know many people all over the US, Germany, Japan, Taiwan, Canada... and they are all saying the same thing... the moral is very low... especially in America. :sad:

fortunate one, you may want to read this article. This explains somewhat of what im talking about. It is very hard for educated, experienced individuals to find minimum wage retail jobs.

 

And yes, I took Econ 101 too. And I know many people all over the US, Germany, Japan, Taiwan, Canada... and they are all saying the same thing... the moral is very low... especially in America.

 

You are confusing human emotions with official government statistics. Your argument is that the human psychological condition is low; thereforee the factual statistical reality should be tossed out. How can a real world issue be subjected to a standard based on pathos? This is why the government use the logical statistical approach to determine what defines a recession as Poloplayer and Karvala have so eloquently stated. One statistic that quantifies the emotional trust in our economy is the Consumer Confidence Index ( link removed ); plus, along with this index there are many more academic research projects that can give you an accurate testament of our current situation.

 

Please take a look at your original post questions:

Im just curious, how does the government not call this a Depression?

This is so depressing to me, when are things going to get better, and when is the government gonna tell it like it is?

 

Your opinionated vent is based on a pinhole view of our current economic condition that a sensationalistic rating based biased news channel exudes to the masses. It really has no logical merit and can only perpetuate the irrational paradigm that we're all going to hell in a hand basket. It would be very irresponsible of our government, and me, to make such an irrational statement on our current economic status. Why would the government want to cause such mass hysteria? The answer is because it doesn't serve our nation to add negative logical fallacies to our current predicament. This is why this subject needs to be put in perspective. I don't want other's irrational paradigms festering a negative contribution to those that want a quick healthy economic recovery.

Im just curious, how does the government not call this a Depression?

The government looks at the big picture to provide information to investors. Those numbers are not relevant to the lives of an ordinary person because the life they live will not be perfectly correlated with the movements in the market.

A recession is a contraction phase of the business cycle, or

"a period of reduced economic activity."[1][2]

The U.S. based National Bureau of Economic Research (NBER) defines a recession more broadly as

"a significant decline in economic activity spread accross the economy, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales."

[3] A sustained recession may become a depression.

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Some business & investment glossaries add to the general definition a rule of thumb that recessions are often indicated by two consecutive quarters of negative growth (or contraction) of gross domestic product (GDP).[4][5] N

A recession doesn't have to include two quarters of negative growth to be a recession. A depression is just a long and deep recession.

A lot of people would have been experiencing recession or depression like facets in their every day lives for many years. Arguing the merits of a technical recession is frivolous because it fails to provide a good indication of state of the lives of ordinary people.

If in your region you cannot find even a retail job and many other people are experiencing the same one could safely assume that area would be in a recession or depression. If not one could safely say the economy is not going well.

Another good indicator is the stagnant wage growth and in some cases a decrease in real wages in the US economy which is one indicator of a recession. The other characteristics have been covered up by using debt.

The bottom line answer is that they're not calling it a depression because it does not meet the definition of a depression to their standards. The other problem is that a lot of multi millionaires and in some cases billionaires are the judge of what the economy is like for the ordinary person ? How could they and their numbers possible know what it is like for a person on minimum wage trying to make a living ? Emperical evidence is not flawless, much less statistical evidence. We learned at University one thing I think that deserves a mention. If your observations do not meet with the prediction of your model - you change the model. You don't ignore the observations until you can find out why it didn't work. But you check the observations first of all. That is in an economics context - you LISTEN to people. Instead of telling them how things are. In short the government has it wrong.

You may feel an emotional depression, but a literal economic depression is a statistical event that can be scientifically measured, not emotionally gauged.

So you may be upset about the current economic recession and the slowdown it brings, but that doesn't make it an economic depression.

What you should be focusing on is ways to solve your dilemma. So you are an educated person who can't get a minimum wage job? You shouldn't be looking for a minimum wage job, you should be opening your job search as far as necessary to find a job in your trained field. For new college graduates, many times that means travelling to other parts of the country that have more opportunities in your field. Start a nationwide job search, and move wherever it takes to get that first job. Once you have experience, then you can consider moving where you want to live.

Look for jobs on national websites and apply to everything you see that is in your chosen career. If that means you need to move somewhere else to ride out the recession til work opens up in a choice location, so be it.

And if you chose a major unwisely (i.e., chose a major that doesn't translate well into a concrete job), then you need to consider retraining yourself for something where you can be employed.

You also have to never give up. Looking for a job in a recession requires constant networking and DAILY activities to find job openings and pursue them.

Also keep in mind that in economic cycles, there are always bad times and always good times. right now times are especially tough due to all the fallout from the bogus loan industry that trashed the real estate market. That will eventually clear, and the economy will improve. Consumer sentiment doesn't necessarily track the reality of the situation, and frequently lags the true financial situation.

So yes, jobs are not easy now, but there is 6% unemployment, which means that 94% are employed. You just need to keep at your job search and recognize that as a new graduate, jobs are ALWAYS hard to find, so you have to do whatever it takes to find one, including relocating if the only job in your field that you can find is elsewhere.

well, leaving your area might be a good idea, but moving is also expensive!

If you are not just out of college and have bought a house, then it's even more difficult. I think alot of people are in this boat, as lots of people are trying to sell their homes now and just cannot do it!

That sad, yes, you cannot give up... but I agree totally! It is just SO discouraged trying to find a job in this economy. Having a college degree and being expected to work for below $7 a hour is just about the most demoralizing thing I can think of!

But people are having to do it. But it SURE is not paying all the bills.

I do hope that if Obama does not want to do something to boost the economy, he's ready to put half the working nation on WELFARE! Cuz we are all going to need it ride out this storm.

BTW, if he's going be such a positive change, someone tell me just WHY the stock market is tanking now... Wow, I cannot believe it.. Stocks that were about $120 per share prior to the election day, are now about $85! And the election was only a week and a day ago!

It's pretty incredible... wish I had a pile of loot and lots of time to wait. I'd buy up all the stocks that are tanking and just sit there and wait for them to start getting better.

I just cannot believe how bad things are.. Ford Motor Co. is below $2 a share!

I don't know WHY they bothered to bail out AIG! Gosh.. insurance companies are the biggest crooks on the planet!! Half the time they don't even want to pay out their own claims to peopel who's been paying them for years on end!

Oh, btw, Capt. Planet, it's extremely difficult for American citizens to try and work in the UK. I tried to get a job, just as an internship for my senior year in college in Bermuda, where my bf lived, and was letting me stay there, and they wouldn't let me take the job!

So.. while working in England shounds very interesting, I doubt they'd hire us Americans, even though we are forced to employ all the people all over the planet, including the Illegal Aliens. I don't know why but I wrote another post about this but it's disappeared! I just think our country really needs to get its priorities str8. If we cannot find jobs for the Americans born here, we've got no business giving jobs to foreigners, esp. ones who don't pay taxes or cannot bother to learn our language!

It just makes no sense at all! And the more our economy fails, the more other countries do too, as we are a big consumer of other countries good also!

 

If in your region you cannot find even a retail job and many other people are experiencing the same one could safely assume that area would be in a recession or depression. If not one could safely say the economy is not going well.

 

Another good indicator is the stagnant wage growth and in some cases a decrease in real wages in the US economy which is one indicator of a recession. The other characteristics have been covered up by using debt.

 

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this is perfect! Thats what I mean, the news and majority simply say recession, but there are parts of the country hit WAY worse than others. That in some areas, it literally looks like a depression beginning. I know all the factors of statistical mumbo jumbo... but in literal interpretation what I see everyday... looks plain downright depressing.

And a note on the decrease in wages. My friend is a restaurant manager, and her boss docked her $3.00 an hour on her wages. So, in essense she got a lower wage for being a good worker. Tell me, how thats not depressing!

Im also, not a recent college graduate. I have job experience. And Im looking for any kind of work now. Obviously, I am looking for jobs in my field but those are far and between. I opened up my search to the bay area. I just moved, so moving is not an option. Funds are tapped. I look, everyday and ask people everyday, for any kind of work possible. I think its easy for people to assume that finding a job is just 'rough' right now. Its beyond rough, its a constant struggle and a constant trail of rejection from jobs... that are going to pay you less than you are worth. It really effects your moral, and now I have a strong respect for people down and out... because anyone can be there.

BUT, I am thinking my only option is school. Im thinking about going to get my credential, and hey im poor enough now to where the government will pay for me! ha.

Yeah, it's a bit ugly right now, but I don't think it's anything compared to the Great Depression. I am very fortunate to have a good paying job for now and hate to see a lot of people get screwed over by all of this, but it is life. It is time for all of us to buck up and help out as much as we can. Obama alone will not be able to take on this or even Congress. I think everyone around the country needs to contribute in whatever way we can.

Many of us are not losing our jobs and are in no danger of doing so. We are definitely going through a recession but not a depression. My mom lived through the Great Depression and what we see now is NOTHING compared to what she saw. She told me stories that curled my hair. Jobs were not hard to find, they were non existent! Food was hard to come by, also. 1/4 or more of the country was out of work, not 7% like now. Times are definitely not good, but a majority of the people are still okay. I wish all of you facing hard times both a great job and much luck. My thoughts are with you. I know it's not easy right now, I just know it's not a depression, though it could get to that if things keep going the way they are.

Many of us are not losing our jobs and are in no danger of doing so

Agreed. I know that my job is not in danger. In fact, my firm is looking to hire 5 more people in one office this quarter alone, and we're looking to hire 200-300 worldwide over the next 12 months. I have friends whose firms are hiring as well.

There are many job losses taking place, but there are many places hiring as well. It all depends on the industry and the skill set that you bring to the table.

I agree with what someone said about the greatest financial crisis in modern times, but really, this is nothing. In fact, I think that's the reason why a lot of people are spoiled in a way. My grandparents hid from the Nazis during World War II. They lived just a couple hundred miles away from Auschwitz. My parents eventually lived and escaped Communist oppression. I'm in my 20s, but so many generations before us lived through so much, and trust me, they don't whine about this stuff. This is absolutely nothing. Yes, it stinks, but we'll get out of this mess in time. Hopefully, we as Americans learn something from it.

Well said... I gave you rep points for giving everyone a reality check. This is the reason why I admire the greatest generation. This is what real sacrifice is and letting go of the selfishness that many in our world project. I wish people can appreciate why we have things so easy it our place in history. Thank you WW2 Gen. Thank you.

Many of us are not losing our jobs and are in no danger of doing so. We are definitely going through a recession but not a depression. My mom lived through the Great Depression and what we see now is NOTHING compared to what she saw. She told me stories that curled my hair. Jobs were not hard to find, they were non existent! Food was hard to come by, also. 1/4 or more of the country was out of work, not 7% like now. Times are definitely not good, but a majority of the people are still okay. I wish all of you facing hard times both a great job and much luck. My thoughts are with you. I know it's not easy right now, I just know it's not a depression, though it could get to that if things keep going the way they are.

Might be true for you jigsup.. but many of us ARE losing our jobs, our homes, our savings, our self-esteem... I know the depression was tough, my folks lived thru it too, but in alot of areas, my area included, there are NO jobs period!

I sat and thought about it, the other day, and i think I have applied to about every single store in our whole town, and yet, only got a handful of interviews in a year's time, and now I got one lousy job that does not even pay me $7 a hour and it's only PT!

And they expect me to follow this dress code that's probably going to cost me a week's worth of salary besides.. and to top it off, they are a at-will company. meaining after you invest in $50 worth of clothes, they can take and fire you for no reason at all. We got 2 HOURS worth of work last week!!

It sucks.. Don't tell me that jobs are plentiful, you just gotta buckle down and stick to it!

Just driving around applying for work, can easily cost you $200 a month! and still you may end up with no work.

Be in mind too, i got two college degrees!

Yeah.. I think we are heading to a depression... I think we HAVE been in a recession, but the stupid govt didn't want to admit that to us.

What..you think governments are always honest with their people??? ROTFLOL... come on now.. let's come back to reality honestly.

I agree with parts of this statement, "Something's going on allright. As far as American cars go, when you build an inferior product, people won't buy them. That part I understand. The businesses going bankrupt and all the people out of work, those things are unusual out here. There have always been lots of jobs in this area, even for people without any college educations. I wonder how long it will take until this nation recovers. Everyone chants "Obama" but we shouldn't hold out too much hope for that. One man can't reverse this, the whole nation is going to have to make some sacrifices. For starters a lot of social programs need to be scaled back as we middle class people are taxed enough, wages need to be frozen, and jobs need to be created. All of this will take time and cooperation."

Well, it's true, you gotta have all those huge SUV owners and Hummer owners who probably helped drive the price of gas up, cuz let's face it.. they certainly consumes alot of gasoline!!

Now, the darn auto companies are almost going out of business and asking for a hand out! Why couldn't they have been creating electric cars all this time instead of some stupid gas guzzling TANK of a car that got 8 mph??

Oh, cuz we are a "consumer" nation! Even Busch advocated us spending alot after 911! I couldn't quite figure that out..

I doubt Obama will be much better, as anyone who can spend $650 million on a campaign fund, doesn't really know much about saving money obviously! LOL

I think we ought to start with lowering CEO's salaries... esp. if they expect us to bail out their worthless selves, while the rest of us, just about starve to death..

Next.. let's lower the salaries of Congressman and Senators, most of them are lawyers or rich anyways.

And honestly they are doing a lousy job running our country. Maybe we could ask all those nations who we all bailed out when they had some terrific earthquake or tsuanmi for some aid for the starving Americans here..

Of course, I ain't holding my breath on that one...](*,)

since we are so "hated" by so many in other parts of the world...funny thing is, though, they are quick to accept our help, if they are in a conundrum of some sorts.

Maybe those other nations could return the favor... Let's see, we've helped our Saudi Arabia for years now, turning them into some of the richest nations on earth. Check out Dubai, if you don't believe me.....

I doubt they would help us out though....

Well, maybe it's time for us to stop helping other nations who have so much contempt for us, and start helping our own people. And just cuz there are some that are not affected by this horrible economy doesn't mean everyone else is doing so rosy.

Even during the Depression, there were rich people who did fabulous! It's simply a fact....

What this is doing though, is destroying the middle class, and that's never good for a country. We are going back to serfdom I'm afraid, pure & simple!

since we are so "hated" by so many in other parts of the world...funny thing is, though, they are quick to accept our help, if they are in a conundrum of some sorts.

Maybe those other nations could return the favor... Let's see, we've helped our Saudi Arabia for years now, turning them into some of the richest nations on earth. Check out Dubai, if you don't believe me.....

Dubai is not in Saudi Arabia.