Still no Recession for the U. S.
Posted: April 9th, 2008 | Author: Joe | Filed under: Economy | Tags: Recession | 5 Comments »Despite the fervent hopes of the media (and some politicians), it is still too soon to even know if the U.S. economy is in recession.
The latest GDP report from the Bureau of Economic Analysis, dated March 27th 2008, states:
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.6 percent in the fourth quarter of 2007, according to final estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent.”
Did you catch that? 0.6% increase for Q4, 2007. While that is quite a big drop off from 4.9% increase in Q3 it still isn’t a recession.
A recession is technically defined as “two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP).”
Still, that doesn’t stop the news media from trying everything to scare up a recession for months. Although the media typically employ various writing techniques to imply the desired outcome, such as peppering stories with emotionally charged terms like “recession fears”, “overwhelmingly likely” or “severe, prolonged recession” and even falling back on the time honored poll. Even Greenspan has to get in on the act.
I find this especially disgraceful. If anyone ought to know better and ought to understand the need to inform and educate people, rather than scare and panic people certainly it is the former chairman of the Federal Reserve. But alas, he seems too bent on book sales to do the right thing.
To be fair, I don’t think members of the media are doing this because they’re in the tank for Obama, or are anti-republican. It’s more insidious than that. Fear sells. The media long ago realized that they can panic people into staying glued to the headlines so they will have the latest information and all the “facts” to make smart decisions.
Still, that doesn’t change the data (courtesy of http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm):
So, here we are at 0.6%. Not pleasant, but not a recession. Am I splitting hairs? Possibly. But shouldn’t we demand our media and leaders split hairs in such situations? To have a media that is practically doing everything in its power to create and augment fear and panic over something that hasn’t yet happened is disgraceful.
The simple fact remains that we do not yet have the data to know if we are in a recession.
So where does that leave us? The same place we were when we started. The best approach to all this noise is to simply tune it out. Turn off the CNBC, CNN and broadcast nightly news. Properly diversify your investments and pay down your debts. Maintain an emergency fund, and sharpen your job skills.
Take this simple approach and you’ll be ready for whatever direction the economy rolls.
If I could only get my wife to stop watching the news… It’s her only vice so what can I say. It does make it harder to convince her of the facts. We are loading up our emergency fund and investments. This was a timely post. I’m justa saying!
I guess if that’s her only vice, it’s not too bad.
My wife and I have been padding our emergency fund and taking advantage of the recent sale on stock as well.
Thanks for stopping by Mark.
I have to say, I don’t watch any mainstream media anymore (well, except for the local news, and that’s just for traffic and weather!). Perhaps THE best thing about the internet is the way it has exposed the way mainstream media manipulates the news it presents.
As for the economy, whatever the stats say, it feels like we are in or at least we are heading into a recession. I’m not saying one is inevitable, just that people are acting like it, and prices on many every day items are increasing noticeably. How much of that is due to talk of a recession and how much of it is truly due to the economy is debatable, I suppose
Chief Family Officer,
It’s an interesting question, isn’t it? Is the economy in such doldrums and the media is representing that, or are the doldrums caused by the media creating and amplifying consumer fears?
I don’t mean to paint the economic picture as rosy. There are clearly many challenges at present, but I just don’t subscribe to the chicken little view put forth by the media daily.
[...] doesn’t feel like a full blown recession. There is plenty of data to illustrate that so far, the U.S. economy is not in a recession. What I’d like to do today is give some anecdotal reasons why I don’t see a [...]