A. A DIFFERENT TYPE OF RECESSION
With a negative GDP in the third quarter this year and more bleak prospects
for the coming quarter, a recession has officially been proclaimed. The "R"
word that we have forecasted for months is finally acknowledged and has been
with us at least a quarter, if not two. However, in comparison to other
recessions, this one is different, as discussed in the following.
First, this recession is affecting the entire nation with no region of the
country immune. Granted, some areas of the country are hit somewhat harder
than others, especially some smaller communities that are strongly connected
to just one or two industries. But all major metros are feeling the economic
downturn in a similar timeframe. In the past, some regions of the country
rolled in and out of a recession at different time intervals, sometimes more
than a year apart. Second, multiple industries have led us into a recession,
not just a couple. It may have started with technology, but autos,
manufacturing, hospitality, airlines and other industries are all weak.
Third, although unemployment seems to be increasing in all metropolitan
areas, unemployment rates do seem likely to reach the levels as in previous
recessions. This is primarily because unemployment has been at historically
low levels. Fourth, we have not been pulled into a recession by an
overbuilding in real estate, which leads us into our next topic.
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