An article by The Associated Press recently reported that the economy will do something it hasn't done before: it is expected to go into recession without, at the same time, contracting. That never happened before - at least not since the government began tracking quarterly growth of gross domestic product (GDP) in 1947.
With all the fallout concerning the housing market, stock market, etc., the economy has managed to post growth, albeit anemic, and so far stay out of recession. Though many say we are already in a recession or about to enter into one, it is not a forgone conclusion.
Generally, a recession is measured by a contraction in the economy. By one of the most important measures, it is thought that 2 consecutive quarters (a total of 6 months) of negative growth is the definition for a recession. According to the National Bureau of Economic Research, a recession is "a significant decline in economic activity" lasting more than a few months. It may appear in GDP, income or other measures.
The GDP has actually in the black, instead of the red, this year posting a 0.9 percent rate of growth for the first quarter. Actions by the Federal Reserve in cutting interest rates, along with other measures have greatly helped to keep the economy from tanking.
Two recent surveys — from the National Association for Business Economics and the Fed of Philadelphia — see growth, albeit mild, through 2008.
Hmm! So, while there hasn't been contraction of the economy to date that begs the question - will there be a recession anyway? If so, that would be a unique thing. Stay tuned, we will find out more as time goes on.
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