So I wanted to try to spark some discussion on the blog today. I do a lot of lighthearted stuff here but I wanted to see if there was any interest in something with a bit more bite every once and a while. The recession is something that is effecting us all in some way. I get what the media is saying about it, but I want to know what you think. I’ve created a new category for “Your thoughts”. If this is successful, I’ll try to work in a post like this a couple times a month. Feel free to vent, but be respectful of others. No personal attacks.
I read a lot of news sources. Lately, I’ve been seeing more and more articles about the recession being over. The stock market is trending up. Consumer spending is up. Economists and Government officials are telling us that it’s over or should be by the end of the quarter. It’s time to have a party, right?
I’m not buying it. I’m not an economic expert, but I think the real measure that we are moving out of the recession is job growth or at least we stop losing jobs. We still lost 550,000 jobs last month. The official unemployment rate is about 9.5%. This doesn’t include the number of people who’s unemployment benefits have expired or those who have just stopped looking for work or those who are underemployed (those working part-time who would like full-time employment). Include those people and the unemployment rate jumps over 16%.
I’ve heard it said many times that a recession is when your neighbor loses his job, a depression is when you lose yours. I know a lot of people who have lost their jobs and I live in one of the states where our unemployment rate is lower than the national average. We have been very fortunate to both be employed to the level we wish to be.
The Questions
How is the economy where you are? How is your “personal economy”?
Do you think the recession is over?
What factors must improve before you will start to believe that the recession is over? Is the the stock market? Seeing companies make money again? Jobs growth? Consumer spending? Credit flowing again?
{ 3 comments… read them below or add one }
Unless you’re approaching this as an academic exercise, I don’t think it matters much what you call it (recession, depression, whatever…). I think the main indicator of whether or not we’re “out of the woods” will have to be a lower unemployment rate. I mean, the health of companies is only significant to the extent that it benefits the public at large, right? Otherwise, “Yippie!” for them, but who really cares? What’s a “normal” rate? 4-6% or something like that? Once we get down to 7% and trending in the right direction, I’ll probably exhale.
I’m living and working in Japan, and though there are signs of economic downturn (to use as general a term as possible) it doesn’t seem to be as bad as in America… though they have a pretty serious government pension problem here, the handling of which is by far the biggest domestic political issue at the moment. I will say that the US economy has been a major factor in my deciding to stay here for at least two years rather than one, as I had originally intended… so I guess it is effecting significant life decisions.
In some way, my wife and I are intentionally contributing to the downturn in the economy because we no longer use credit for any purchases. We hardly even use a debit card. We decided to get out of debt and adopt a debt-free lifestyle. Consequently, we use more of our income to attack our debt and less on discretionary spending. Since January, we paid off a Jeep that had two years left to pay on it; and later this month, we will pay off our van, about 28 months early. Add to this, we are giving more to the church and saving more. We see the effects of the recession around us, but personally we have been blessed. We both have jobs that cannot be outsourced. I have thought the recession was not as deep as others because every where I turn, restaurants are full, stores are full. However, I know some areas are hurting. I think the country is positioning for a rebound. But I am always optimistic. I never took my money out of aggressive mutual funds.
Well, in Indiana, things are pretty scary. We were fortunate to find out that our local GM plant will not close but they are still looking at almost 6000 MORE layoffs to keep it open. Cash for Clunkers has inspired the new car sales industry and reopened a local parts manufacturer, but is putting small used car lots out of business in droves.
Local food banks are over whelmed and looking at closing their doors. I spoke to a neighborhood shop owner this morning and found out his help wanted sign warranted over 50 requests for applications in 24 hours for a part-time position. Here we cling to the hope of things turning around, but we doubt it.