Happy First Birthday, Economic Recession!
Breaking news from 12 months ago – the U.S. recession officially began in December 2007.
The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) released a statement on Monday stating a Determination of the December 2007 Peak in Economic Activity.
By way of background, this committee is responsible for determining the start and end of a recession, which they define as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.”
The committee focused on payroll employment as a key indicator – consistent with the data shown in slide 5 of my 2009 Economic Forecast webcast in November:
As you can see in the chart, total non-farm employment has dropped by 1.2 million jobs since peaking in December 2007. Employment in the wholesale distribution industry is declining at a slightly faster rate than the overall economy, although regular readers will recognize that some wholesale distribution sectors have been expanding in 2008.Job losses are widespread across most industry groups according to the most recent data (from October). Many core customer groups for wholesaler-distributors are cutting jobs:
- Manufacturing employment declined by 90,000 jobs in October and is down by almost 500,000 jobs in 2008 through October.
- Construction employment declined by 49,000 jobs in October, with job losses concentrated in residential construction. Since peaking in September 2006, employment in the construction industry has fallen by 663,000.
The overall U.S. unemployment rate rose to an unexpectedly high 6.5% in October – the highest rate in 15 years. The unemployment rate is forecast to hit 7.5% by the middle of 2009 according to the Wall Street Journal’s most recent survey of economists.
So, any ideas on what to get a recession for its first birthday?
1 comments:
Well it is official we are in a recession and have been for the past year. Amazing isn't it. WE seriously need to get on with alternative energy projects and get out from under our dependence on foreign oil. This past year the average family went broke at the pump alone filling up the family vehicles to get back and forth to work. That cost most of between 60-100. per fill-up. Then there was the grocery store where the price of EVERYTHING rose sharply as increased production and shipping costs were passed on to the consumer.So we quit going out to eat so much or at all, put off buying things we wanted or really needed, some even to the point of having no money left for necessary medicines. No one single factor in our economy has ever caused so much damage to society as the high cost of fuel this past year. Yet,little attention has been given to this face. Jobs and homes have been lost at a record rate as the consumer is forced to cut back spending. While we are busy doing the happy dance at the pumps OPEC is working out their strategy to raise the price of a barrel back up to 75-100 per barrel. We need to utilize free sources of energy like wind and solar and new technologies such as plug and hybrid cars. It would cost the equivalent of 60 cents per gallon to charge an electric car at the rate of the average electric bill. That elec could conceivably be generated at least partially from sun or wind power. With bailouts left and right and an economic stimuli's package that cost 168 BILLION and did nothing for our economy...WHY NOT BAIL US OUT OF OUR DEPENDENCE ON FOREIGN OIL? That money would have gone a LONG WAY toward getting some alternative energy projects set up. Jeff Wilson has a great new book out called The Manhattan Project of 2009 Energy Independence NOW.
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