We Are Not In a Recession, Not Even Close

Even ignoring last year's 12.5% drop in the median wage,

The jobless rate has risen 0.6 percentage points since March. "When unemployment rises by more than 0.5% from its cycle low a recession generally ensues," wrote Robert Brusca of FAO Economics.

So there's a couple of problems with this line of thinking.

Without writing a paper...the true unemployment rate is higher than the official rate, and does not include workers that have been dropped out of the labor force, those underemployed, those with subsidized jobs or those that have started new businesses in an effort to feed themselves.

The official unemployment rate is determined by dividing the number of unemployed workers by the total civilian labor force. Economists generally define unemployment as the state in which a person is without work, available to work, and is currently seeking work. The only way government statistics can verify unemployment is if a person is on unemployment "insurance" and specifically states and agrees that he/she is looking for a job as a condition for continuing to receive assistance. When the "insurance" expires, there is no further tracking of statistics or results measured. Since this does not consider the true economic intricacies in any measure, the unemployment rate is essentially bogus and inaccurate. If you don't like those words, try "inaccurate". Try being "unemployed" past the end of "insurance" coverage and you quickly discover the truth of statistics. There are also plenty of folks that do not qualify for "unemployment insurance". These are simply not measured.

TNTalk,

Your argument is why economists use the unemployment rate as a trending figure not an absolute figure. In that capacity your arguments do not detract from it's utility.

In proving or establishing anything about a recession or lack of a recession, which is the opening headline credit, the article is absolutely unfounded. That is the grasp of my statements. It is a good "attention-getter" though and has made for a rich conversation. :)

Yah - it was published last year, didn't happen last year. It's a 12.5% drop in the last 30 years, not 1 year. Still no way to make that sound like an achievement.

Here's the Pew Charitable Trusts study on which the blog entry was based.

Creativity and persistence will always win.

No, sometimes people have skills and circumstances that allow that. Clearly you have never been faced with the bills from catastrophic illness or other reasonably insurmountable odds.

It's great to be Pollyanna but there are some harsh realities like the growing number of people working two jobs who can't afford to cover the basics. Not everyone is blessed with ingenuity, some are just honest and hard working and those folks are hurting big time.

P.D., I do like your style, grit and honesty. I lost a prosperous business Sept. 2005 and my husband a well-paid position. My new car was stolen shortly thereafter where I live now. That was actually good because we couldn't afford it after the huge loss. The fact is that I am in exactly the situation that you describe and survived through a grave illness in 2006 with the grace of God. I don't have a car now and am not sure how I can get one. I am a go-getter and unused to sitting on my tail and it bothers me. I was in a fall that injured my knees last Nov. I could be bitter and let it all eat me alive. I live in the real world to be certain, but I don't let the rubbish in the world define me. I won't be stopped. I don't live on the streets and have a reasonable place to stay. Life seems especially harsh at times, but I insist on looking beyond my circumstances. The reality is that my husband and I refuse to give up even though it looks... The fact that I am online today is proof of a miracle and persistence too, maybe even ingenuity. Ingenuity does not always mean prosperity. Sometimes you have to lower your expectations for a while, especially when the real estate, banking and mortgage guys have just finished a ten year party, all expenses paid.

Hat's off to you and to many who do rise above adversity. As sad as your story is, and I don't mean to make light of it, others have far graver situations where they come back from war or out of dire poverty or simply have medical expenses from chronic illness that go far beyond amounts even affluent families can manage.

It is important to recognize the error of the view that opportunity is there who are willing to work their fingers to the bone is not the reality. It just does a great disservice to those not able to overcome the obstacles to suggest that it is a personal failing when we have a society that makes survival a challenge even for those with a support network and skills.

Technically unemployment has nothing to do with recessions.

I would think that a recession would cause consumers to spend less which would cause buisinesses to cut back which would mean less jobs available. Do you have any theories to back up your statement?

yes, you understand.

ComSen,

See TNT's statement above regarding what counts in unemplyment figures. Jobs may be cut but workers may find other jobs. If someone gets let go from a $75,000 job and then finds a job at McDonald's, they don't make a blip on the unemplyment number.

Additionally GDP declines when exports increase. Because of the decline in the dollar, we should expect to see an increase in exports. So, the decline of the dollar is definately a major factor in calculating GDP and thus a possible recession

It is my oppinion only and maybe it dont make sence and maybe i'll spell some word's wrong here and punctuation wont be right but here it is. I have been in 3,4,500.000.00 dollar home's that are being built and the shoddy work i see in most is appauling. The Code in most cases for elec. heating and plumbing is being inforced, but what about the structure itself. Contactor's laugh off the fact that 2x4 joint's are loose by saying dont worry bout it drywall will cover it. What happened to the carpenter who made joints so tight that you couldnt slide paper in between. It aint there the name of the game is build it fast and build it cheap and sell it high. Material at the retail level is sometime's double the wholesale price, so then it is hard for the consumer to see the inflated prices. Therefore new home buyer's dont see the 200 percent markup the builder has put in. I pay you material cost i pay you labor cost and i give you extra for a saaveing's why do you have to rape me and get rich and retire in 5 year's, This is what I see happening. So now is it the consumer's fault for buying a house beyond the income they have comeing in. I think everyone want's the best home for there family in the cleanest neighborhood they can get in, I think. If you sold me that 300.000.00 house for 200.000.00 that still makes you a healthy profit then maybe i could afford that payment. Any way there are so many thing's that are to blame for the houseing market and I blame a big portion of it on the builder's and of course the lending agencies gotta get there cut too so who really know's who's doing the rapeing. I have been building remodeling and such since i was old enough to hold a hammer, I GET BY. Yeah that's it I get by I live from paycheck to paycheck and nothing in the bank but I get by. I pay my bill's and I pay my mortgage in the low income home and neighborhood I live in, But I dont live beyond my mean's. The most important thing is I dont rape my client's. EXAMPLE: customer had me bid to replace kitchen and dineing room floor( my bid was 2000 dollar's and some change.) My competitor's bid the same job and out of 7 more bidders the lowest bid was 4800. I made money they were happy and I have return buisness, so where do the other's get off on rapeing people. Contractor's lisence is a joke all you gotta do is pay the fee and get the insurance to be one. The guy cant even drive a nail but he's a general contractor out there throwing up shoddy @!$%# and you get the house that start's falling apart in a year. Bottom line then I'll shut up. Dont price yourself out of the market that people can maintain. If you do this ,AND YOU HAVE IN NEW HOME BUILDING then dont cry to the government to bail you out. And LENDER"S dont rape your customer's with a product that aint worth the money. I may go to my grave the poorest @!$%# who ever had to have state put him under but I'll go there with a clear concience, and i'll take care of me and mine till it happen's.

Please use paragraphs.

RumWalker,

That's an interesting statement as the savings rate last year in the US was -2%, meaning that we spent more than we actually earned.

When people get scared about the economy they will spend less.

New home sales are at a low because they were being built at a rate significantly higher than demand called for leading to a surplus or even glut of inventory on the market. That is not really related to the overall economies health as the negatives for those working in the housing market are offset by the positives of lower cost housing. The only real issue has been leveraged debt based on housing prices, yet that isn't related to new home sales and is in fact a different concern.

No, that the rate of sales is down 26%. Although the other may be true as well as homes staying longer on the market push the price of those homes down.

It's based on the rate of home sales per year. Basically, what you do is take the number of homes sold a year ago and see how much it went up or down. The 26% down they are talking about is the single largest rate of decline in homes sales from the year before since 1980.

Don't know the total number of homes sold, but can probably find it on Google.

BOY I wonder how many illegal alien's are working under the table to replace those American Citizens laid off.

Yes, we have to stop illegals from taking jobs from Americans and depressing wages.

crap apple annie...

There's no need to insult people here. Reported as inflammatory...

I'm thinking there should have been a comma. I don't think he meant to insult anyone. Could be wrong though.

Ahhh... By George... I think you're right ; ) If that's the case, apologies.

As long as major corporations believe they need cheap labor and are willing to pay the slap-on-the-wrist fines that they get when found out, there will be illegals coming into this country. Hurting an individual who wants to make a better life for him/herself will do nothing to stop illegal immigration.