When Tough Times Strike
What is a recession? Though some of us may have difficulty when they try to define recession, by now, we all are familiar with its most common effects. In a time like this, we need to learn to foresee, spot, and safeguard ourselves from financial disaster. The more we know about its signs and symptoms, the better we can learn to protect ourselves. To find out more about our current economic recession, read on.
Define Recession
How do we go about defining our current global recession? Taking into regard the definition given by the National Bureau of Economic Research (NBER): “A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators”, this gives us a basis to go on.
3 Recession Symptoms
Although these are not really technical signs of a current economic recession, they are commonly experienced by most everyone during such a period. Accurate indicators are stemmed from resources as the stock market, financial institutions, and the government. These entities can detect and identify a recession before we experience the following:
1. Job Losses – The Bureau of Labor Statistics (BLS) measures job losses through U3 numbers it produces. This involves recently laid off workers as well as those who’ve applied for unemployment insurance. Job lay-offs and unemployment statistics are often broadcasted on the evening news. Massive layoffs occur when companies attempt to prevent losses due to diminishing production and sales.
2. Real Estate Sales Decline – Global manipulations created by mortgaging firms, no doubt, have caused the real estate market to crash. Hence, the decline in the housing market cannot be totally blamed on foreclosures. As mortgage lending has decreased, so has new construction. This too explains our current economic recession.
3. Lack of New Jobs – And why are there no new jobs? This is because corporations lay off workers, issue hiring freezes, or move their production needs overseas. Numerous small businesses have been forced to close down as well.
The U3 number, as determined by the BLS, reports only the unemployed who are currently eligible for benefits. This fails to account for the U6 number, which not only includes the total U3, but those no longer eligible or receiving unemployment, those who are underemployed, as well as those who gave up seeking employment.
What Next?
Now that we’ve answered the question “what is a recession?” we can begin to move forward with protecting our financial futures. I encourage you to learn all you can about our economy, our monetary system and our banking institutions to further educate yourself and discover ways to best protect yourself.
If you’ve been asking what is a recession you’re certainly not alone. Click the link and sign up to watch a video which will explain everything you need to know about the recession and the mechanisms behind it. I can help you learn how to start protecting yourself and your financial future from the economic recession. Don’t wait until it’s too late!