DEFINITION OF RECESSION.COM
Definition of Recession .com provides valuable historical recession data & information on all past and current U.S. Recessions including technical definitions of recessions and the underlying causes of economic recessions. Our online resource guide also offers valuable advice on preparing for a recession & surviving a recession with detailed information on recession proof businesses, recession proof investments, & recession proof jobs and careers
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The definition of a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. The gross domestic product (GDP) in the United States is tracked by the Commerce Department's Bureau of Economic Analysis. A recession may involve declines at the same time in the measures of overall economic activity such as employment, investment, and corporate profits. Recessions may also be a combined with deflation , or, alternatively, sharply rising prices or inflation. An economic depression is a severe or long recession. |  |
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The Economic Cycle: |
| When
the economy is strong, most people are employed and making money. There will then
be a larger demand for goods such as food, electronics & vehicles and this
increases so much that the supply can not keep up with the demand This excess demand creates a rise in prices, or inflation. As prices go up, salary's need to rise to keep up with the rising prices of goods The rise in employment cost for companies translates into a rise in prices for most items. When the prices for goods and services get too high, consumers decide goods are too expensive and slow down or stop buying. When the demand decreases, companies lay off workers because they don't need to make as much as before. Decreasing demand fuels declining prices, which means the economy is in a recession. Companies counter act this by lowering prices to spur the demand. As demand picks up, people begin buying again, fueling the need for greater supply. And the cycle starts again. |
We have put together a
directory of resources to help you navigate around the gathering storm on the
economic horizon. Our goal is to help make your life recession proof!
Search
for recession proof careers, investments, businesses and more!
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Purchase Structured SettlementsRecession Proof Industries
These industries sell and make products that all people use. Cars will still need repair and hospital visits are unavoidable.
Medical Services / Health care
Pharmaceuticals
Necessities: food/grocery stores/chains
Cosmetics
Entertainment
Home & vehicle repair & maintenance
Debt collection
Tax preparation
Career/Job search
Energy: Electric, Oil, Gas
Security/Alarm services companies
Weapons industry
Vices: Tobacco, liquor & pornography
For more information on recession proof industries: RECESSION PROOF INDUSTRIES.COM
Recession-proof Jobs & Careers
Education.
The U.S. Bureau of Labor Statistics has historically shown teaching to be relatively recession-proof.
Energy.
Jobs related to oil and gas, alternative energy and even nuclear are likely to see strong growth
Health care.
Almost half the 30 fastest growing occupations are concentrated in health services -- including medical assistants, physical therapists, physician assistants, home health aides, and medical records and health information technicians -- according to the U.S. Bureau of Labor Statistics.
International business.
Good language skills and knowledge of other cultures and an ability to work in another country will land you a good job.
Environmental sector.
There is a huge and growing industry geared towards greening the earth
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Security.
Police, corrections and border security will always be a good career bet.
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Recession-proof Businesses
Health Related Businesses:
People will still get sick in a recession and have need for heathcare
Death Related Businesses:
People will still have the need for funeral services and other related businesses.
Food Related Businesses:
People will still need to buy food in a recession
Repair Businesses:
Cars still break down, tvs will need repair, roofs will leak, etc.
Job Search Related Businesses:
Fewer jobs mean more people looking for them.
Tax Preparation:
Even in a recession taxes still need to be paid.
For more information on recession proof businesses: RECESSION PROOF BUSINESSES .COM
STOCK MARKET RECESSION .COM
Recession-proof Investments
Buy at least two index funds
Buying stocks in index funds assures that you have bought a small portion of almost every stock and bond with a good financial history.
Invest a set amount every month
Every month set aside a portion of your money for investing. invest every single month without worring about the gains and loses of the everyday market.
Limit the number of times you check on your funds.
These are long term investments and the weekly ups and downs in the market might tempt you to sell.
Do not take money out of the accounts.
These are investments not cash reserves to be used for cars or vacations.
Invest more if you can
If you get some extra cash invest it in the fund that has done the worst. This way you will get more stock for your buck and will be buying low in hopes of it rebounding in the future.
For more information on recession proof investments: RECESSION PROOF INVESTMENTS .COM
Recession History in the United StatesGreat Depression (1929 to late 1930s), stock market crash, banking collapse in the United States sparks a global downturn, including a second but not heavy downturn in the U.S., the Recession of 1937. Durations: 43 and 13 months respectiviely.
Recession of (1945) Duration: 8 months
Recession of (1948 - 1949) Duration: 11 months
Post-Korean War Recession (1953 - 1954) - The Recession of 1953 was a demand-driven recession due to poor government policies and high interest rates. Duration: 10 months
Recession of (1957 - 1958) Duration: 8 months
Recession of (1960 - 1961) Duration: 10 months
Bond Inversion of (1965 - 1967) no recession materialized
Recession of (1969 - 1970) Duration: 11 months
1973 oil crisis (1973 - 1975) - a quadrupling of oil prices by OPEC coupled with high government spending due to the Vietnam War leads to stagflation in the United States. Duration: 16 months
1979 energy crisis - 1979 until 1980, the Iranian Revolution sharply increases the price of oil
(1981 - 1982) Duration: 16 months
Early 1980s recession - 1982 and 1983, caused by tight monetary policy in the U.S. to control inflation and sharp correction to overproduction of the previous decade which had been masked by inflation
Great Commodities Depression - 1980 to 2000, general recession in commodity prices
Early 1990s recession - 1990 to 1992, collapse of junk bonds and a credit crunch in the United States leads to one quarter of US GDP decline, and therefore not an official recession.
Japanese recession - 1990 to 2003, collapse of a real estate bubble and more fundamental problems halts Japan's once astronomical growth
Asian financial crisis - 1997, a collapse of the Thai currency inflicts damage on many of the economies of Asia
Early 2000s recession - 2001 to 2003: the collapse of the Dot Com Bubble, September 11th attacks and accounting scandals contribute to a relatively mild contraction in the North American economy. Since the US GDP never actually declined in this period it is not considered an offical recession. (Wikipedia)
The New York Times
THE ECONOMY: IS A RECESSION ON THE WAY?; PORTENTS OF TURNS FOR THE WORSE-OR THE BETTER
First published:By ROBERT D. HERSHEY JR. November 29, 1987
LEAD: EVER since the Oct. 19 stock market collapse, most analysts have been saying that the economy would slow down as a result, perhaps enough to send the nation stumbling into recession. They argue that consumers, who account for two-thirds of the gross national product, have lost both wealth and confidence and will pull in their horns accordingly.EVER since the Oct. 19 stock market collapse, most analysts have been saying that the economy would slow down as a result, perhaps enough to send the nation stumbling into recession. They argue that consumers, who account for two-thirds of the gross national product, have lost both wealth and confidence and will pull in their horns accordingly. Business executives could also dampen the economy by deciding to scale back production or to carry smaller stocks of goods.
How can we tell what's ahead? A discussion follows of some of the broad economic issues of the day and of statistical indicators that in coming weeks might show if a recession looms.
Question. The stock market is said to be one of the more reliable predictors of business conditions. Does it determine as well as forecast?
Answer. It could, but it doesn't have to. Whether we get a recession depends mainly on the psychological reaction to the market shock. A reduced ability to buy, though important, is clearly a lesser factor.
Q. If people cut spending, doesn't that mean they save more? Wouldn't that be just what is needed?
A. In the short term, a sharp cut in either private or public spending would almost certainly produce recession. Even some of the staunchest supporters of President Reagan's push to reduce government are warning against too rapid a cut in the Federal deficit.
In the long term, however, most economists agree that the United States does need to save more and consume less. Ultimately, the American standard of living depends on the nation's productivity and this can't be increased without huge investments in new technology, training and other things that allow us to use our resources more efficiently.
Q. If the big worry now is recession, what are the early signs?
A. The Commerce Department's monthly Index of Leading Indicators, which next comes out Tuesday, was designed as a sort of early warning system. And it has proved useful, though in recent years it has come under attack. Some experts say some of the 11 components of the index are obsolete. For example, ''vendor performance,'' or the percentage of companies reporting slower deliveries from suppliers, is less significant now that many companies find it more efficient to keep stockpiles lean. But other components, such as new orders for consumer goods, remain closely watched.
Q. Retail sales seem to have held up pretty well since stock prices plunged. Isn't that reassuring?
A. Not entirely. Although the stock collapse was indeed attention-getting, consumers may need time to fully recognize their new situation and to put any needed spending curbs in place. Some people, for example, have not yet received a mutual fund, profit-sharing or other occasional financial statement since the plunge. They may be sobered when they do. Many economists are waiting anxiously to see how the Christmas shopping season goes.
Q. But it is good, isn't it, that the Federal Reserve has responded to the drop by pumping more money into the economy?
A. Most economists think this was an essential step, one that has, in fact, helped bring interest rates back down. The danger, of course, is that the Fed will overstay this policy and that the extra money will revive inflation, driving interest rates up again and slowing business activity. It takes some months for a definite trend to show up in, say, consumer prices, and by then severe damage may have been done.
Q. How can one tell what the Fed is up to?
A. Watch the interest rate on Federal funds, which are overnight loans among banks. Check Friday's newspaper to see how much the banking system is being forced to borrow through the Fed's discount window. Higher rates suggest a tighter Fed policy.
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