2-3 min read
It was my desire to blog about the Jones' new born baby girl and how to get her to college. Our staff reminded me that we blogged about getting the Jones kids to college only a few months ago. I did in fact receive an interesting call into my office from Samantha early last week, which lead to this post.
Samantha: Good morning Jenny.
Jenny: Samantha, good morning to you. So how is your family and the new baby doing?
Samantha: They are all doing well. Jenny, my question is I heard on television that the recession is officially over.
Jenny: Really?
Samantha: Yeah they said that the recession is over, so I thought I could go back out and shop for the new baby.
Jenny: Does Charles know of this desire?
Samantha: Well we talked about it while he was taking a shower yesterday evening.
Jenny: Oh, so you two never really set down and talked about the increased line item within the monthly budget.
Samantha: I was afraid you would say that.
Jenny: Samantha, I will answer your question it's just I always look at the big picture that is my job and that is why you pay me. To answer your first question about the recession, statistically the recession is showing signs of ending.
Samantha: Well let's back up, if you say statistically then it's just not a word that people just keep throwing out.
Jenny: Well let me explain what the true definition of a recession is and then we will move further. A recession is a decline in production (creation) of products and goods like cars, furniture, etc.. It is also a decline in employment meaning companies hire less and reduce workforce to weather the contraction or downturn in the economic environment. It also is a decline in real income or salaries meaning pretty much no raises for a while. Now what the media stations and print outlets are saying is right in a way. Technically, we are considered in a recession if after two consecutive quarters or six months of the indicators that I just mentioned are declining. If we (the US have negative growth for that period of time we are in a recession)
Samantha: So technically the media was right, we are no longer declining right.
Jenny: Yes and remember one of the indicators I mentioned was unemployment right?
Samantha: Yes, I remember you saying that was one of the indicators.
Jenny: I'm going to ask you a question that will answer your question about it being safe to return to shopping, so are you ready?
Samantha: Yes!
Jenny: Ok, is Charles' job guaranteed to produce income for the near future?
Samantha: Well guaranteed, no nothing is guaranteed.
Jenny: Then you have answered part of your question. The other part is understanding the unemployment indicator of our U.S. economy. That is a lagging indicator meaning in simple terms if the economy is in a recovery state or coming back than jobs and income will not lead us back. It will be the last piece of the puzzle so we are not out of the woods yet, because stable income is still not certain for many of us.
Samantha: So is it safe to go out and shop again yes or no?
Jenny: (After a long pause) Did you hear anything I just said?
Samantha: Ok I got it. So can I at least buy some matching yellow buttes I saw on sale earlier today?
Jenny: (jokingly) Are you and my wife related by chance?
Posts
