We are Not in a Recession

Recession is a popular term in this day and age, and many people point to it as an accurate definition of what  the current state of the US economy is in.  I can't tell you how many times people have told me "recession this" and "recession that", as it is almost some sort of explanation for all their problems.  In fact, they even go out of their way to use some of the media bites they often hear and call the current market "the great recession".  These views are all incorrect.  In fact, we have been out of a recession since the 2nd quarter of 2009.

A recession by definition is two consecutive quarters of negative GDP growth.  As demonstrated by the chart to the right, the US has had positive GDP growth since 2009.  That said, it should also be noted that the US economy is not very robust and is only currently growing at about 2-4% per year.  

Alternatively, the economy has affected many individuals differently than others.  One of the most striking metrics for showing how the recent economy has affected others differently is the unemployment rate by education level.  Currently, those who have a 4 year college degree have an unemployment rate hovering anywhere between 4.5 and 6.8%.  Higher than the historical average, but pretty good overall.  The real situation comes with those who only have a high school degree.  For them, the unemployment rate is approximately 24%.  That seems almost absurd to think that 1 in 4 people without a college degree are unemployed.  Now if you take into consideration all the people who consider themselves underemployed (not working enough), and you have a far more significant problem.  

It's no wonder why many people consider the current economy to be in recession.  With unemployment high and affecting certain groups more adversely  people tend to find catchy words to classify the current state of things.  Instead of using recession, consider using the word "stagnation".  For example, "boy things are pretty bad in this stagnant economy".  Not only are your accurately describing the situation, but you might even wow some of your friends.

Wonderful Moment of the Day: Don't forget to vote tomorrow!