What recession?

For the last several weeks, it seems that all over the news there is talk about our economy is in a recession. I personally believe that 90% of this so-called recession is hype and all politically driven.

Here's a pretty standard definition of recession:

A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's GDP.

Notes: Recession is a normal (albeit unpleasant) part of the business cycle. A recession generally lasts from six to eighteen months.Interest rates usually fall in recessionary times to stimulate the economy by offering cheap rates at which to borrow money.

If you follow this definition, I don't think you can say quite yet that the US economy is in recession. Has there been a decline in certain sectors? Sure there has been, but the jobless rate is still very low (around 5%) and the GDP still increased, but at a slower rate of 2.2%. If GDP was -1%, then we could declare a recession. We also need more time to determine the growth/slow down rate.

I'll be honest with you, though, I do believe within the next 12-18 months, we will be heading into a possible "Great Depression" period of time. This belief is based on statistical data, financial cycles, and birth/death rates. Check out this article about these concerns.

Larry