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Recession now certain, economists say

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posted on Oct, 2 2008 @ 05:07 PM


Even before the latest squeeze in the credit markets, the U.S. economy had slipped into what could be a relatively lengthy recession, economists say.
The latest data, covering activity in August and September, make it all but certain that the academic economists will eventually declare that the economy is in a recession.

"Anyone who's wondering if there's a recession should stop wondering," said Nigel Gault, U.S. economist for Global Insight, which will release its updated forecast on Monday. "The recent data were deteriorating sharply" even before factoring in the latest impact of the credit squeeze.
Global Insight doesn't think the recovery will be quick or powerful. The economy will likely contract for three quarters and then show weak growth in the second quarter next year.
If the recession lasts from December 2007 until April 2009, as Gault suspects it will, it would be the longest since the Great Depression. And the recovery, when it comes, won't feel anything like a boom.

(note: I'm using a tinyurl link to because ATS doesn't like the URL format used on that site)

The "official" definition of a recession is:

...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.

As I'm sure most of us have known, the "official" declaration that America is in a recession is merely a formality.

The above Marketwatch article is a difficult read, though not a surprising one to those who have already felt the pinch on their wallets. Often by the time the official declaration of a recession comes, it's already several months along already. I believe we're experiencing that now, and Mr. Gault in the above article indicates he believes we've been in a recession since December 2007.

What concerns me is that the updated economic reports are due out Friday and Monday; with the stock market already extremely volatile, any bad news could well result in further losses which will only exacerbate the situation.
Another concern is that the reports coming out won't take into consideration the potential spending from the bailout bill (if it passes). The current projection looks to the beginnings of a slow recovery in April '09. If the bill passes and over $700B is added to our national debt, I fear the recovery will be later and much slower.

posted on Oct, 2 2008 @ 05:25 PM
this "recession" started a long time ago...the only reason why they didnt call it earlier is because it didnt hit them yet.

posted on Oct, 2 2008 @ 05:26 PM
reply to post by rangersdad

Right! WE have been in a recession for a couple years now! And they are just admitting its going to happen!

Sorry its not funny, but had to laugh!

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