It does feel like a recession. We are driving less, going the speed limit when we do drive, eating out less, and basically watching our finances. Yet I don’t know anyone who has lost their job and I got a good raise last month. Oil is making it feel like a recession even though we aren’t technically in one.

Wages are stagnant or rising at lower rates than prices of necessities. Recession, depression, downturn. Call it what you want, but people are hurting.

And it’s a vicious cycle. People spend less at the store, stores layoff, less dollars in the economy, less spent in the store, more store layoffs, layoffs at surrounding businesses that service store employees, even less money….

Recession is a specific economic term referring to two consecutive quarters of negative GDP growth. It’s hard to “feel” a recession in our daily lives. What we really notice is higher inflation or an increase in unemployment–two events that don’t necessarily happen at the same time as a recession (especially unemployment, a trailing indicator of economic activity). We’re only using the word recession because we see people screaming about it on TV.

Are people noticing higher food and energy prices? I sure think so. I think it’s affecting the disposable income of many of my friends. There are quite a few lower middle class/middle class people being affected by the housing market as well. Many are paying for mortgages that are worth more than their house.

In terms of unemployment, I think most folks I know aren’t more concerned about their job or their employer than they were a couple years ago (outside of the housing/construction market). I’m not saying that others aren’t concerned, but it’s not like it was easy to be a flight attendant or an automaker when the Dow was at 13,000.

It seems like we’re adjusting to a life that’s more like what our parents had–higher inflation and less available credit.

Is it possible that spending has risen because prices are going up,but we are not buying as much as we used to? I don’t know if that factors into their statistics. Our grocery costs for a family of five is up about $40 a week ,but we aren’t even getting as much as we used to.That means we cut back in other areas-don’t eat out,plant a garden,hang laundry and don’t use air conditioning to save on electricity. I certainly don’t have as much disposable income, and we have lived frugally for many years.We are not foregoing a vacation this year, because we have never taken one-we are spending as much as we can afford now to increase energy efficiency at home to keep utilities more affordable this winter.

Recession or not, many people are hurting much more than my family.I felt we as a country were overdue for hard times( I get nervous when things go too well for too long, LOL),as well as the cyclical nature of the economy, but it is really hard to adapt as quickly as we are needing to.If the economy hadn’t declined at such a rapid pace, Americans would have had time to adapt,but the rampant consumerism that became the norm is hitting many who were unprepared very hard.Add to that the mortgage crisis, the lack of affordable alternative energies,skyrocketing gas prices,loss of good-paying jobs-the economy seems set to implode on itself.There are hard decisions that should have been made years ago,but the politicians are no good at hard decisions,especially if they are trying to get votes.I don’t see much change in the coming elections, either, so I will keep doing whatever I can to take care of my family, and help others when I can, but I won’t hold my breath for the government to fix anything.Still, I think if we can get through the next few years, we’ll be ok.Many will just have to change their priorities.It won’t be easy for any of us, but we will adapt.What other choice do we have?

Economics is the science of explaining the rain that one feels when economics is whizzing on ones leg.

Going green in caseyville–GDP and consumer demand/spending figures are generally in real economic terms; they adjust for the impact of inflation.

Paul,
Thanks, I wasn’t sure about that.As many are saying,it doesn’t really matter if it meets the definition when the country is hurting as badly as it is.It is probably for the best if people become less dependent on credit, although many are probably buying groceries with credit cards these days.Too many people have forgotten how to be self-reliant,as older generations have had to in the past.

I have been around awhile, and seen some things. It doesn’t feel like a recession. It is a unique experience. I am dependent on the real estate market so I am hurting and have been for a while, but I am not discouraged and I see an end to it all.

So many aspects of the economy are strong. I feel like I’m riding an eighteen wheeler and 4 of the tires have blown, and I’m sitting over one of those tires. It’s rough and I’m bumping along the bottom, but I feel like I’m being carried along by the rest of the economy. Its wierd.

I see a recession all around me. Fortunately, its a recession in wasting. Actually, if people stop being wasteful that is a good thing.

Unemployment is hard to figure. My neighbor is working 6 10 hour days per week, They can’t find qualified office employees to hire. In her words, ” If education keeps going downhill I’ll be working 80 hour weeks in a year or two. ” Those are NOT minimum wage jobs. Their lowest pay scale is $11.50 per hour. Note: She is a department head, earning enough to be exempt from overtime pay. But they pay her, and other exempt employees overtime as well as hourly rated employees.
incidentally, they have over 200 employees and need another 80. Go figure.

Paul said: “GDP and consumer demand/spending figures are generally in real economic terms; they adjust for the impact of inflation.”

They would adjust it using “core inflation” figures, which by definition exclude certain items that face volatile price movements like food and gasoline. Here in the US, since February of 2000, we use the Personal Consumption Expenditures (CPE) price index which goes further by “weighting” the statistics to diminish the impact of certain price fluctuations. Look into it and you can find volumes more detail, but suffice it to say that despite Gas and food prices skyrocketing, the Government’s chosen way of measuring inflation doesn’t show this.

The upshot of this discussion is that ‘going green in caseyville’ could be right about the increase in consumer spending. The government’s inflation figure is artificially low, which means they are adjusting our spending by a tiny percent, that doesn’t truly reflect the inflation we see (gas, food, etc). In other words, although we are paying more for less, the way the government measures it, we are just all spending more!