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United States Businesses

US Economy is in a Recession (npr.org) 266

It may seem obvious, with double-digit unemployment and plunging economic output. But if there was any remaining doubt that the U.S. is in a recession, it's now been removed by the official scorekeepers at the National Bureau of Economic Research. From a report: The NBER's Business Cycle Dating Committee -- the fat lady of economic opera -- says the expansion peaked in February after a record 128 months, and we've been sliding into a pandemic-driven recession ever since. In making the announcement, the committee pointed to the "unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy." At the same time, the committee noted the recession could be short-lived. The U.S. added 2.5 million jobs last month, after losing more than 22 million in March and April. Many forecasters expect economic output to begin growing again in the third quarter.
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US Economy is in a Recession

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  • ignoring that it's not enough to make up for the drops in GDP we've seen.

    Those May unemployment stats were kind of dodgy too. They left out the under-employed, which was something like 5 million furloughed workers.

    It sucks, because you can't solve a problem that you won't admit exists...
    • Economy and Trade is a complex topics.

      With many company Execs buying back stocks into their companies Stock prices have recovered well.
      Being the rest of the world is in recession too, often numbers based on percentages are often off kilter too.

      A strong economy is how much money people are spending on a wider diversity of products and services.

      GDP and Stocks Prices are more of an indicator on the economy, but not really the truth behind it.

      GDP = private consumption + gross investment + government investment

      • Interestingly enough, the US recession started in February, LONG before the US President was acknowledging the pandemic, much less the stay at home orders started in any states.

    • by bjwest ( 14070 )

      ... Those May unemployment stats were kind of dodgy too. They left out the under-employed, which was something like 5 million furloughed workers...

      Sorry, but under-employed people are not unemployed, so should not be included in the unemployed roster. Yea, it sucks they lost their job and now have to make do on less than half their previous salary, but they do have a job. If they didn't have it, someone else would so the unemployment numbers would balance out.

    • Yeah, my company is seeing 3x and 4x growth month over month. It's been amazing. Not hard, since April revenue was close to zero.
    • by smooth wombat ( 796938 ) on Monday June 08, 2020 @03:20PM (#60160922) Journal
      Those May unemployment stats were kind of dodgy too. They left out the under-employed, which was something like 5 million furloughed workers.

      Stats for March, April and May were all wrong because of a "misclassification" error which BLS knew about for those three months and chose not to do anything about it. The head of BLS even stated they would not go back and correct the numbers they put out last Friday (the 5th) even though they knew of the error when they issued their report.

      So yeah, fake numbers. Known fake numbers, and everyone is happy. After all, when the central planning committee, er, Federal Reserve, is pumping $7 trillion of money pulled from thin air into the works and giving it to companies who then lay off thousands of employees [nytimes.com] while giving CEOs millions of dollars, who cares?
    • by mamba-mamba ( 445365 ) on Monday June 08, 2020 @03:37PM (#60160992)

      Unemployment stats aren't really "dodgy" per-se. It is true that the one number, unemployment, is not the whole story, and it is also true that many/most people don't really understand what the number means. BUT, the Bureau of Labor Statistics (BLS) has been doing things the same way for a long time and if they change it now that will, in some sense, invalidate their data record. Or, I mean, it will make it hard to show trends over a long period if there is a point where they changed their process. The good thing about the unemployment stats is that they are a long-running consistent data set.

      Also, for those who are interested, there is a LOT more data available from BLS besides just the headline unemployment rate. They have total jobs, size of workforce, workforce participation rate, etc, etc. I definitely recommend spending some time at the BLS website to dig through the data. Here is one page which may be interesting:
      https://www.bls.gov/web/empsit... [bls.gov]

      Many of the data series are also available from St Louis FED, and you can make graphs using the data at their website. For example, here is a graph showing total number of employed persons (not adjusted for populations size).

      https://fred.stlouisfed.org/gr... [stlouisfed.org]

  • by Anonymous Coward on Monday June 08, 2020 @01:53PM (#60160564)

    So - I'm playing this 'Earth' game, and I'm playing the USA.

    On my turn, I keep picking 'conservative' - and it says it'll boost my economy by 5% each turn, but it keeps reducing my economy by 5% instead. Was there a reverse in the sign in the code or something?

    Last time I complained, I was told that I had a bunch of social and infrastructure issues dragging down my economy score, and that I'd need 4 turns of 'liberal' to invest and fix that - but I did 2 turns of that, and it didn't seem feel right, so I stopped it. Could that be the issue?

    No - no, I'm going to insist that this is a bug. Conservatism isn't working how the tooltip said, so I'm calling that wrong, not my lack of understanding or strategy in this game.

    • Invest? Liberal? Like all those shovel ready projects that never happened?

      Just because you forgot doesn't mean everyone else did.
      • I had one client that had to move to a new building because their existing office building was in the path of a shovel ready project.

        They literally had to clear out and move into new office space in like 3 months, it was pretty aggressive as office moves go.

    • lol just to funny "need 4 turns of 'liberal' to invest and fix that" like government conservatives or liberals fix much of anything ever!
      But in all cases the taxpayers money evaporates.

      Just my 2 cents ;)
    • The tooltip also said you have a choice whether you want your economy one way or another, it's not like that tooltip was the only bogus one.

    • by argStyopa ( 232550 ) on Monday June 08, 2020 @04:48PM (#60161296) Journal

      I think it's a resource leak. Doesn't matter what choices you make, I see that every cycle I'm burning something like 25% more resources than I have - which is ridiculous, I'm also playing the USA and we have the like more wealth and resources than any other country ever in the history of the game.

      I mean, my score is way the hell up around 26000 but it doesn't seem to be benefiting my position.

      I thought the whole resource leak was better back around turns 1992-2000 but turns out that not only was that based on a UI reporting bug, but ultimately the cascading issues from that bug really fucked me around turn 2007.

    • Recession is when a lot of people you know lose their jobs and can't find new ones. Depression is when you lose your job and can't find a new one.

    • by hey! ( 33014 )

      For now, recession.

      The usual criteria are either (a) a recession that lasts three years (some say two) or (b) a reduction in GDP of at least 10%.

      Q1 (Jan-Mar) US GDP contracted 4.8% (preliminary estimate). Assuming the final figures for Q2 are at least similar, we'll be right on the cusp of a depression unless growth resumes in Q3 and 4.

  • In economics class I was told it's, "two consecutive quarters of negative GDP growth." [wikipedia.org]

    Don't be surprised when you see a conflicting article in about three months.
  • It's a bit silly to call a known temporary condition caused as an emergency reaction to an external factor a recession.

    That's why when doctors sedate someone, they don't report "The patient lost consciousness", they report "The patient was sedated".

    When things return to sorta normal, it will be meaningful to look at the state of affairs, not while the economy is mostly in a medically induced coma.

    • by DogDude ( 805747 )
      But, it's not going to be temporary. Billions of dollars that used to flow through restaurants, movie theaters, etc. aren't coming back, because those businesses aren't coming back. Assuming the virus magically goes away, all of the people owning those failed businesses won't suddenly have money to re-open. And, all of the evictions are going to create a huge economic wave that we haven't felt yet. I own a business, and I wish things were temporary, but this is a long term (multi-year) depression we're
      • by sjames ( 1099 )

        That's on the politicians that half-assed the economic pause. But we don't know how many of those cases will be and we won't until we return to "normal". I did indicate that once that happens, it will make sense to look at the situation.

    • Re:A bit silly (Score:5, Insightful)

      by mamba-mamba ( 445365 ) on Monday June 08, 2020 @03:42PM (#60161018)

      I will try to say this respectfully. You have NO IDEA how hard-hit the economy has been as a result of this. You are in the earliest stages of realization. Others who have a better view than you do understand that we are not going "back to normal" in a few weeks, few months, or few years. Demand for many things has now been near permanently reduced or extinguished.

      • by sjames ( 1099 )

        How hard the economy has or has not been hit is irrelevant to my point. We will know that when the restrictions can be lifted and some time passes to see what does or does not recover.

        For now, the patient was in a drug induced coma and the IV drip has just been stopped. It's a little early to begin assessing cognitive deficits.

        Something for you to chew on, reduced demand for a scarce resource means less scarcity, If you see that as a universally bad thing, you long ago gave up on the idea of an economy exis

        • Hmm. Well, if the economy has negative growth, that is a recession. So if the economy has been hit hard and shrinks, that is by definition a recession. So it does not seem irrelevant to me that the economy has shrunk and will likely continue to shrink. I will grant you the point that the future is not written yet, so it is, technically, premature. But this is not my first rodeo. The global economy is really, really fucked right now, and there are a lot of businesses that are going to struggle for some time

    • by hey! ( 33014 )

      Well, what *would* you call a two quarter contraction in the GDP, if not a recession?

      It's a description of fact, not assignment of moral responsibility.

      • by sjames ( 1099 )

        The best description would be a medically induced coma.

        The drop in GDP was not induced by chaotic economic forces. We know exactly the cause and we know that cause will be removed.

  • by Proudrooster ( 580120 ) on Monday June 08, 2020 @02:24PM (#60160692) Homepage

    For being a recession, the stock market is back to where it was prior to COVID.

    Is it time to sell everything off and wait for the crash or is the market rolling again?

    • The market attempts to predict 6 months in the future. The players in the market already knew a recession was coming back in March. They are now betting for a full recovery soon. If COVID cases start increasing rapidly, then the market will tank.
    • by Tablizer ( 95088 )

      the stock market is back to where it was prior to COVID.

      The gov't has been bailing out the stock market for past decade via Quantitative Easing and other techniques. Whether direct benefits to stockholders was politically intentional or not is subject to debate, but either way it seems they've gotten used to being bailed out and still expect it based on stock prices.

      • Trump does love his precious stock market, so I guess we can expect bailouts until November. :)

        • by Tablizer ( 95088 )

          If T loses the election, I do expect a stock drop. Some may use that as political evidence he boosts economies, others that he's been kissing up to Wallstreet. But the stock market and the economy are not necessarily in sync.

          (He did slightly boost GDP before covid, but at the expense of debt.)

    • For being a recession, the stock market is back to where it was prior to COVID.

      You know the stock market is a leading indicator based on intent right? As in Tesla stock isn't as high as it is because they are making more profit than GM. The stock market going up is based on the idea that sometime *later this year* our economy is going to recover. The idea that we've hit rock bottom.

      You know a recession is a lagging indicator right? As in it doesn't car what is happening today, it only cares about what happened *last month*.

      Incidentally the stock market looked pretty damn grim last mon

  • by Tablizer ( 95088 ) on Monday June 08, 2020 @02:55PM (#60160788) Journal

    At least Captain Obvious still has a job.

  • by PuddleBoy ( 544111 ) on Monday June 08, 2020 @03:11PM (#60160880)

    During the year prior to the pandemic, I met with my financial advisor a couple of times to talk about whether we should make changes for the future. (Advice: check with your bank/ccu to see if they offer free financial planning - it can be an eye-opener) His response was an emphatic yes. According to him (grain of salt...), he and many other advisors were certain that 2020 would see us dip into recession (maybe a small one - who knew?)

    We did a general shift away from so much stock exposure and into more bonds. (and some other stuff) I know my investments never went down nearly as much as the stock market as a whole. And they have regained all lost value.

    My point being that, though COVID is right up there as a reason for a lot of our difficulties (economically), the economy had had a looooong expansion and nothing lasts forever. There was some pre-existing weakness in the economy that needed to self-correct. Voila! Correction granted.

    Just sayin'

  • Without we'd have to find another scapegoat so we don't have to admit that the system's cracking.

  • Close but not quite (Score:5, Informative)

    by markdavis ( 642305 ) on Monday June 08, 2020 @06:18PM (#60161648)

    >"and we've been sliding into a pandemic-driven recession ever since."

    No. We have been sliding into a pandemic-RESPONSE-driven recession ever since. There is a big difference. The pandemic did not cause businesses to close, huge masses of people to not work or lose their jobs, stock markets to sink, and countless trillions of dollars of more debt. That was the result of the chosen responses. You can argue if you think the responses were appropriate or not, or how other responses would be better, but to say the pandemic did it is not at all accurate.

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