Double dip recession is a myth

[billy10388]

Originally Posted by EconoMutt

I think we're in for slow growth for an extended period of time.
It will feel like a recession to many people, but technically we will have growth.

I also think so.

[neguy11]

I don't think a lot of people CAN revert back to their old ways because the easy credit is gone. The standards are so much stricter now. My income has increased and my debt has decreased but I'm still denied every time I apply for any type of credit. I used to be able to go online and with the click of a mouse have my credit limit increased, but no more and anytime I request an increase it's denied. I'd like to have more available credit so my credit score would go up, but I'm SOL.

[PMMM]

But it has hit a lot of real people and hit them hard. I think of those people all the time when I go by storefronts that are empty and used to hold a small business. There are thousands of them. I also feel for those people that did the right things and still got caught up in the layoff cycle.

I was recently in Maui and I couldn't believe all the businesses that were gone due to the economy compared to the last time I was there. Many of those people didn't do anything wrong and possibly did everything right. But they still suffered.

I can't help but feel for those people.

I don't feel for for those that jerked every dime out of their home to live a lifestyle that they couldn't afford or those that bought a house they had no business buying hoping they could turn the house before it went south.

[jefffou]

I agree that a "double-dip recession" can't really occur here. Recessions (depressions or any other economic cycle) are mostly personal. I mean, if one is able to keep his job, recessions can be beneficial, personally. Prices fall and interest rates may be lowered (Hello, Refi!).

It appears to me that when someone mentions double-dip recession, they're really speaking of the stock market. Meaning, there may be another leg to the stock market collapse.

Don't know whether this will happen or not, I just think that the word "double-dip" can only refer to something that has fallen, risen back to some degree, and is to fall again.

My $.02

[curtis.lesa]

My thoughts exactly!

[ez1]

Originally Posted by disneysteve

There really isn't much correlation between the unemployment rate and corporate earnings. If anything, it is a negative correlation. Higher unemployment means higher earnings. If a company is able to maintain productivity with a smaller workforce, they reduce operating costs and increase their profit margin.

Great point! There is an article that supports that very well. I can't post links yet, but if you go to the CXO Advisory Group website, on their blog, there is an article linking unemployment rate and market fluctuations. I believe it's a free article. Maybe someone else can post a link?

[scotland]

The first post on this subject was made about a year and half ago.
In todays climate it looks like we are slipping into another recession.
In previous recessions the way to fight the recession was to stimulate the economy but now the politicians are squabbling about spending cuts.

[MonkeyMama]

Originally Posted by disneysteve

One very interesting fact in the article is that despite the fact that we keep hearing about a 10% unemployment rate, it really depends on where you look. The rate among those with a college education is just 4.4% and among woman with a degree it is even less than that.

It's funny you mention, because in California we feel the unemployment numbers are WAY under-reported. The job market has been terrible here for most of the last decade. Both of our parents "retired" though the economy is the reason for their retirement. (My FIL decided to officially retire and draw a pension before he was laid off AGAIN, and my dad is still looking for work). My spouse easily falls in there, since he hasn't worked in a decade. HE hasn't looked for a job in 7 or 8 of those years, but he has looked for employment and not been able to find it.

In our immediate families, I am the only one with steady employment. Heck, throw in cousins and sisters and in-laws. I am the ONLY ONE with steady employment for the past 10 years. These are all college educated people who generally have no problems finding/keeping work. I can hardly think of any friends or family that haven't suffered from long-term unemployment.

I think we have been harder hit than many areas. (& certainly places like Detroit are far worse off - I know it could be far worse).

[greenskeeper]

It's been one long slide until the govt stepped in with "funny money" (QE1, QE2, and QE3 which they aren't advertising yet) to prop up the markets and economy temporarily.

Actual unemployment is well above 10% (more like 16-18%) because like most govt statistics....they lie!

just like inflation is calculated without energy or food prices considered, two of the things every american uses daily!

[photo]

Originally Posted by scotland

In previous recessions the way to fight the recession was to stimulate the economy but now the politicians are squabbling about spending cuts.

But the economy was never stimulated. Government gave the illusion it was stimulating the economy, but reality is that infusing more government money will do nothing except give more illusions.

The problem is that politicians are like little children who make quick decisions without thinking it all through. For example, Cash for Clunkers was a complete joke. We have a 16-year-old car that was not eligible, yet a 4-year-old luxury car qualified for the program.

[Frugal]

I am a woman with two college degrees, and have been laid off four times in the past several years. The statistics officially put out about unemployment by the Labor Dept., etc. are a lie and totally inaccurate...and dramatically understate the reality for people like me. It is nice that there are people not affected by the recession, but those of us affected are still feeling the pain each and every day!!

If fewer people apply for unemployment, it does not mean that there are fewer people unemployed. Many have simply given up, or run out of benefits. I can understand how people would give up, when I know of people saying to me recently they apply and keep trying and cannot get so much as a phone call from a company.

Oh, and there are massive lay-offs in our area (gov't lay-offs and related)...and literally three more houses right next door to each other down my street went on the market overnight last week...next door to the one still unsold after seven-eight months on the market...

So yes, the double-dip recession is a myth, but so is the concept of a "recession". Not only from my personal experience, but from that of others around me dealing with far worse, I believe we are truly in the early stages of the next Greatest Depression.

[WISEWOMAN]

I feel hopeless. I have a job with good benefits but it's sucking the life out of me. I'm doing the job of two persons and my employer expects more. I long for an opportunity but fear change could lead to unemployment in this market. It's a fact, younger cheaper is replacing experienced mature workers.

[photo]

Originally Posted by Frugal

I believe we are truly in the early stages of the next Greatest Depression.

Normally, I might argue against that, but unfortunately, circumstantial evidence is increasing. What is also clear, in part by reading these forums but also by just observing social trends, is that many people do not know how to live within or under their means. Many people seem to spend on what they desire and then complain when they can't pay for the necessities, a phenomenon that first came to my attention by reading the Tightwad Gazette newsletters by Amy Dacyczyn. I think she labeled it "feast or famine" or something similar.

And, as more and more people become dependent upon the government, the worse it's going to get. The "economic stimulus" by the government did not only not stimulate the economy but made it worse for everyone.

[dawnwes]

I read part of that article. We too are in the latter group. DH has a stable job (knock on wood) and has even gotten decent raises the last two years. We have no debt other than mortgage and even though I wish our mortgage were smaller, we are doing fine.

We started our frugal journey before all this started and aren't planning to change our ways now!

Dawn

[ez1]

Originally Posted by Frugal

If fewer people apply for unemployment, it does not mean that there are fewer people unemployed. Many have simply given up, or run out of benefits. I can understand how people would give up, when I know of people saying to me recently they apply and keep trying and cannot get so much as a phone call from a company.

You can follow the U-6 unemployment rate currently at 16.1% - it includes the people who've given up. Also, you can look at labor force participate rate to make sure that unemployment numbers aren't changing just because there are fewer people in the workforce.

[irmanator]

I am wondering how they figure if a woman originally gets laid off then discovers that thru frugality and not needing daycare for the kids, becomes a sahm with no immediate intention of looking for a job, Do they consider her unemployed for the purpose of the statistics? Maybe she gets so good at gardening, couponing and yardsaling that she never ever wants to or needs to go back to work?

(how I wish this was me)

[dawnwes]

I don't think that would matter, she still gets laid off.

This would be for a man or for a woman.

I am not currently working but I did not get laid off. My income IS missed....I made decent money and carried our health benefits, which we now have to pay for. I am frugal and the kids don't need daycare, but even with daycare when I worked I brought home enough to make a noticable difference.

Dawn

Originally Posted by irmanator

I am wondering how they figure if a woman originally gets laid off then discovers that thru frugality and not needing daycare for the kids, becomes a sahm with no immediate intention of looking for a job, Do they consider her unemployed for the purpose of the statistics? Maybe she gets so good at gardening, couponing and yardsaling that she never ever wants to or needs to go back to work?

(how I wish this was me)

[dawnwes]

Interesting.

I found this table Table A-4. Employment status of the civilian population 25 years and over by educational attainment the most telling. Unemployment is among those with college degrees is less than half of those without and less than 1/3 of those without high school diplomas.

Dawn

Originally Posted by ez1

You can follow the U-6 unemployment rate currently at 16.1% - it includes the people who've given up. Also, you can look at labor force participate rate to make sure that unemployment numbers aren't changing just because there are fewer people in the workforce.

[snafu]

The unemployment figures are extrapolated from the number drawing unemployment insurance benefits. Those who are not eligible or who have received all entitlements are no longer part of the statistic. A great many people have created tiny entrepreneurial work to keep a roof overhead and food on the table.

To me double-dip means my investment portfolio which had mostly recovered to an acceptable level [not where it was before all fell off the track] has been dropping daily. Rather than continue buying more for my investment accounts, I was angry and frustrated with the figures in our retirement segment so splashed out and made purchases I'd researched and considered for almost 3 years.

I'm not having buyer's remorse [yet] but the reaction from family and friends was surprise. I guess they see me as the family frugalista. DH is thrilled with our new-to-us RV.

[ez1]

Originally Posted by snafu

The unemployment figures are extrapolated from the number drawing unemployment insurance benefits. Those who are not eligible or who have received all entitlements are no longer part of the statistic. A great many people have created tiny entrepreneurial work to keep a roof overhead and food on the table.

Snafu, are you referring to the "unemployment rate" figures from BLS? Those aren't from unemployment insurance benefits. They're from surveys. The weekly initial claims are from unemployment insurance benefits though. Hard to tell whether your post might have been referencing an earlier comment rather than the ones I'd been pointing out.