2.05.2008

Recession watch.

CNN cites the drop in the services sector as an indicator (to many economists) that we are in a recession. The only problem is that the score, which is a complex average not unlike the NFL's QB rating, is based on assumptions different from those previously used. Thus, there is no 1:1 comparison to be had. That said, they cite negative growth, which combines with job losses in Q4 of 2007 to indicate larger losses.



I personally think we are there. Yes, we need 2 quarters to prove it, but that doesn't change whether you are or are not in a recession for those 2 quarters. There is also a notion of a "flat growth recession." I'll pass along what I learn about that.



Bottom line, recession watch is moving from "Are we in it?" to an attempt to stay ahead of the game with, "How should you manage your finances in a recession?"

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