It's official: US in Recession since Dec. '07

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GrnMarvl14

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NEW YORK (CNNMoney.com) -- The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .

The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.

The NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began last year.

Employers have trimmed payrolls by 1.2 million jobs in the first 10 months of this year. On Friday, economists are predicting the government will report a loss of another 325,000 jobs for November.

The NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said.

In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.

Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining. That has yet to take place during this recession.

This downturn longer than most

The current recession is one of the longest downturns since the Great Depression of the 1930's.

The last two recessions (1990-1991 and 2001) lasted eight months each, and only two of the 10 previous post-Depression downturns lasted as long as a full year, according to the NBER.

In a statement, White House Deputy Press Secretary Tony Fratto said that even though the recession is now official, it is more important to focus on the steps being taken to fix the economy.

"The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that's where we'll continue to focus," he said. "Addressing these areas will do the most right now to return the economy to growth and job creation."

President-elect Obama's transition team did not have an immediate comment on the recession announcement. But other top Democrats said this is further proof of the need for another economic stimulus package, which Obama has advocated.

"With rising costs of living, rising unemployment, record foreclosures and depleted savings, we must do more to help families make ends meet," said Senate Majority Leader Harry Reid in a statement. "With the cooperation of our Republican colleagues, we intend to send a plan to the White House as soon as possible following President-elect Obama's inauguration next month."

The NBER did not give any reasons or causes of the recession. But it is widely accepted that the housing downturn, which started in 2006, is a primary cause of the broader economic malaise.

The fall of housing prices from peak levels reached earlier this decade cut deeply into home building and home purchases. This also caused a sharp rise in mortgage foreclosures, which in turn resulted in losses of hundreds of billions of dollars among the nation's leading banks and a tightening of credit.

The government has taken many steps to try and prevent the economy from falling into recession, but little has worked to this point.

The Federal Reserve began to cut interest rates in September 2007. In February, Congress passed a $170 billion tax rebate meant to stimulate the economy. But that only boosted GDP during the second quarter.

The financial market and credit crisis worsened during this summer, prompting Congress, the Treasury Department and the Federal Reserve to pump trillions of dollars into the nation's economy through a variety of programs, including a $700 billion bailout of banks and Wall Street firms and hundreds of billions of lending by the Fed to major companies and lenders
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So...yeah, it's "officially" a recession in the US, which means the rest of the world's likely in one, or soon will be. ...Fun times all around.
 
yay... Devaluation of currency EVERYWHERE! No one is going to be able to buy grains or rice now!

In all seriousness, the public already knew that. It's the government that is now realizing it and can have freak out time. People are saying it's really bad, but I haven't seen it be like 1920s bad. I'm sure we will pull through as usual. These recessions always come in cycles.
 
So... 'wanna start taking bets on when the Recession will end?

I say late 2009/early 2010.
 
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SlashLeaf said:
So... 'wanna start taking bets on when the Recession will end?

I say late 2009/early 2010.
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I'm going to go with the 2010. From what I've been hearing and reading, the worst is yet to come. Basically, this coming summer is SUPPOSED to be worst than the rest of the recession.
 
After such a long time? Couldn't see that coming...*rolls eyes*

I think by the end of Obama's presidency the recession will be over.
 
Weren't we being repeatedly told by the "powers that be" that we weren't in a recession? That we were just in a "soft recovery" or something like that? Guess they blew that one.

Nomura said:
I'm going to go with the 2010. From what I've been hearing and reading, the worst is yet to come. Basically, this coming summer is SUPPOSED to be worst than the rest of the recession.
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I'm thinking you're right. A friend of mine said this past March that we were already in a recession and it was going to be one of the worst we've ever seen. He was right about the recession; his predictions are now scaring me.
 
Silverwynde said:
Weren't we being repeatedly told by the "powers that be" that we weren't in a recession? That we were just in a "soft recovery" or something like that? Guess they blew that one.
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Weren't we also told there were WMDs in Iraq?
 
Misty said:
The nature of the world today is such that we will never see anything like the Great Depression ever again. Basic necessities like food and clothing were expensive in the 1930s. Nowadays, necessities are very cheap, thanks to China and such.
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That is, until China closes the technology gap, becomes economy #1 and self-sufficient agricultural-wise, and then turns on the greedy American companies looking for cheap labor.
 
GrnMarvl13 said:
So...yeah, it's "officially" a recession in the US, which means the rest of the world's likely in one, or soon will be. ...Fun times all around.
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Due to Australia's recent resource boom (especially in WA ;-)) chances of Australia falling into a recession are slim to none.
 
Ben Cousins said:
Due to Australia's recent resource boom (especially in WA ;-)) chances of Australia falling into a recession are slim to none.
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Goody for you. Thank you for putting up a post that does nothing but gloat about the fact that the country you live in is currently better off economically than the one that is the focus of this thread.

On-topic, now...*sigh* honestly, I'm getting a bit freaked. I've got college to pay for, this is not what I needed to hear. I am now seriously taking the 'free room and board' offer that Resident Advisors get as a bit factor in me deciding if I want to apply for it next year. :-/
 
Emerald_Dragonite said:
Goody for you. Thank you for putting up a post that does nothing but gloat about the fact that the country you live in is currently better off economically than the one that is the focus of this thread.
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Ignore him. Some people take delight in the suffering of others.

Emerald_Dragonite said:
On-topic, now...*sigh* honestly, I'm getting a bit freaked. I've got college to pay for, this is not what I needed to hear. I am now seriously taking the 'free room and board' offer that Resident Advisors get as a bit factor in me deciding if I want to apply for it next year. :-/
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I hear you, man. I'm in college myself and paying for it *before* the economic downturn was a bitch. I'm not sure if I'm going to be able to attend next semester or even graduate next year.

I suppose the best thing to do is tough it out if you can and find ANY way possible to make it through. Remember, even if the Recession lasts four years, it'll still end and you will have spent that crappy time getting through school. Once you're out, you can reap the benefits of a blossoming job market and returning economy.

If you can't make it, that's fine too. Just make the decision that's best for you.
 
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I too have college, but for the time being, I have financial aid paying for it as well as a few scholarships. I'm worried I'll lose my financial aid which means I'll have to take out a loan, which is the LAST thing I ever wanted to do. Then again, I probably won't even be able to get one of those. This is gonna be a long couple of years....
 
Nomura said:
I too have college, but for the time being, I have financial aid paying for it as well as a few scholarships. I'm worried I'll lose my financial aid which means I'll have to take out a loan, which is the LAST thing I ever wanted to do. Then again, I probably won't even be able to get one of those. This is gonna be a long couple of years....
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I know what you mean. I hate having loans because it's like there's always a debt hanging over your head.

But think of it this way: your education is the one thing no one can ever take away from you. They can repossess your house and take a crap on your credit report if you don't pay it back, but they can still never take back the time and knowledge you aquired while in school.
 
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SlashLeaf said:
I know what you mean. I hate having loans because it's like there's always a debt hanging over your head.

But think of it this way: your education is the one thing no one can ever take away from you. They can repossess your house and take a crap on your credit report if you don't pay it back, but they can still never take back the time and knowledge you aquired while in school.
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Yeah, I know, but it screws up my plans for life.
 
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