Recession or Not?
Well, I for one firmly believe we are smack in the middle of a recession. A recession is classified as several consecutive months, 3 at the least, where the GDP, or Gross Domestic Product, is reduced, consumer spending is down, and consumer confidence are at record lows. I would say that what has been happening lately classifies as a recession, and not even anything that has happened recently, but I think it’s a collection of what has happened over at least the last year. That’s just my opnion, from the news I read about financials in the paper and from what I’ve observed myself.
Recently me and my best girlfriend went shopping in a more upscale shopping mall out in the Cleveland area, and couldn’t believe not only how packed the parking lot, restaurants, and mall itself were, but also how many consumers were doing just that - consuming. These weren’t all just browsers, they were definitely buyers, as attested by their multiple bags of merchandise.
I have heard that some markets are really suffering though, one of them being the new and used car market. New car sales are at record lows, and manufacturers seem to making special offers on them just to move them off lots and entice people to buy them in this down market.
They are also making special financing offers like low apr credit lines and fixed low apr percentage loans so that consumers can rest assured they are getting a good deal on paying for the new car as well, which is a big ticket item for most people and requires a lot of thought and research (aka shopping around) to decide on what to purchase.
It may be a slight rally as has been seen in the stock market as well, because of the rebates that the government is giving back to tax paying citizens (and from what I understand, even non tax paying citizens will be getting a rebate). People may be going out and spending this money instead of stashing it away, and since no one has actually gotten their rebate checks yet, they are probably anticipation spending since they know they will be getting it soon. It still doesn’t take away the fact that consumers are hurting, our dollar is weak, and home sales are tanking.
