Quote:
Originally Posted by theking
A recession is when the economy has negative growth for two quarters in a row. The economy has had positive growth for the past several years. High unemployment does not define a recession. BTW...it is my opinion that the new unemployment numbers will now be the norm with minor fluctuations....just as in the past 4 or 5 percent was the norm.
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GDP is a pretty shitty measurement of economic well-being. It measures the output of the economy, but not some of the things that matter most, such as jobs, income and wealth. GDP is a quarterly accounting gimmick that may not be an accurate reflection of the economic reality. It includes inventory stockpiling and export growth, things that don't really increase the living standards of Americans. In other words, we made a little bit more stuff, but it went into warehouses and onto ships, not into our homes and workplaces.
Most economists define a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, and by that definition we are certainly in a recession. GDP is a part of it, but so is job growth, income growth, industrial output and business sales. Basically, if jobs are plentiful, then the economy is doing OK. If jobs are scarce, the economy is poor. Anybody that tries to tell you that we are not in a recession is either a liar, a fool, or severely misinformed, possibly a combination of all three.