The National Bureau of Economic Research announced today what Americans have known, or at least suspected, for the past year: the United States is in a recession. It’s official.The recession, according to the NBES, began in 2007, again, no earth-shattering news to many Americans.
The statement came even as the stock market, which had a rebound last week, tanked on the news, dropping 400 points by noon Monday and closing the day down by 680. With a public still reeling from months of soaring gas prices and the fallout of higher food and other retail items (due in part to exploding transportation costs), the reality of recession with or without documentation from a national bureau.
In making their determination on the state of American economy, the NBES examined records on jobs and job loss, real personal income, industrial production, and wholesale and retail sales. The last two recessions (1990-91 and 2001) both lasted less than a year.
Initial reports of “better than expected” holiday spending may not be an indicator of the true retail market this holiday season, since many shoppers who bought into the Black Fridayscenerio seemed to be after the sharply discounted big ticket items like computers and audio/visual equiment. One of the problems for retailers is that these items have been so steeply discounted so early there is a diminishing profit margin — little “wiggle room” for more cuts. Apart from these specialty items, consumers seemed conservative and, at least in Clarksville, not as willing to randomly spend.
There is no fudging a national declaration of “recession.” It’s, here. It’s now. And it’s been here for a while. It’s an issue on which the current administration has been in a state of persistent denial. For the rest of America, the lower and middle class worker bees, it’s reality.They have the bills and the decreased spending power to prove it.
