Monday, March 31, 2008

Recession

What is the definition of a Recession? Are we in one?

There's been so much talk about Recession lately. Are we, aren't we. Will we see more of a decline in the GDP in Q2? Will the Stimulus package brought about by the Feds help?

Simply put, "In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. WIKI says, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

In 2007 the GDP for each quarter declined. Healthy growth is 2-3%. Q4 2007 was .6%. Economic growth plummeted from 4.9% in Q3, and 3.9% in Q2 2007. The total GDP for the year was 2.2%, down from the 2006 growth rate of 2.9%. The big concern now is the Q1 GDP for 2008. A recession could ensue if Q2 GDP also turns negative.

Given the data. Are we in a recession? What do you think.

1 comment:

Eamon said...

We are certainly in economic decline. Here in the UK houses are beginning to fall in price, banks won't lend out money, and people are talking a lot more about saving instead of spending. I think it has been due for a few years (normally 7 years of boom and a couple or so of economic decline).