Information having to do with recession
Many industries are downsizing or simply going out of business. Thousands of people are finding themselves with either reduced hours, reduced wages or simply without a job. You may hear the terms “economic recession” tossed around a lot by the media and politicians but what does that really mean to you. It is obvious that the world is experiencing some hard times, especially the United States, so gathering all the information you can about recessions is absolutely crucial. This article will cover some of the basics regarding recessions. It can answer many of your questions and give you a general knowledge about what a recession is and how you can better prepare yourself for the times ahead. Don’t count on a quick income shortcut to bail you out. However, sometimes just knowing what is happening with the economy can give you peace of mind that eventually it will end and things will get better.
How is an economic recession identified?
Julius Shiskin in an article published in the New York Times in 1975 gave several indicators of when a nation was in an economic recession. Only one has really stuck around and that is when there are two quarters where the Gross Domestic Product (GDP) is down. Other economists will also point to a rise in unemployment of 1.5% over a year time. The National Bureau of Economic Research (NBER) is the organization within the United States, and also referred to across the globe, for broadcasting the dates of a recession such as when it began and when it will, hopefully, end. Their definition and indicators are slightly more defined and broad than Shishkin’s. They believe that it is more than just down quarters of Gross Domestic Product. Indicators are also people losing their jobs, income levels falling and businesses losing revenue and downsizing, going overseas for cheaper labor and pricing or closing their doors. This has to happen over a set amount of time and has to last for more than a few months.
How heavily does the stock market play in an economic recession?
Stock markets do play a role in an economic recession but not in as much of a way as you might think. Though there usually is a decline in the stock market before a recession, the majority of stock markets falling occur after the recession is actually well in place. This is because people no longer have the credit or the excess funds to devote to stock market trading.
Is the United States considered to be in an economic recession right now and if so, when was the last time?
Yes, the United States is now considered to be in an economic recession. But it has not been the first time nor will it be the last time. Since 1854 there have been 32 economic recessions. The last one occurred between March 2001 and November 2001 which only lasted 8 months. Prior to this recession, since the 1980’s, there has only been one that has lasted longer than 8 months and that occurred during July 1981 and lasted until November 1982. So far the recession the United States is in right now has lasted 20 months. It started in December of 2007 and so far economists have not given a clear date that they expect it to end.
Are there other countries, other than the US, that are experiencing an economic recession?
There are some other countries that are now beginning to feel the sting of an economic recession. Some of these countries are the: United Kingdom, Japan, China, Ireland, India and New Zealand. Others are on the brink of being considering in a recession but are waiting to see what their next financial quarter will be like. If it is as predicted then many other countries may be added to that list.
