Where’s the Recession?

It’s been several months now, if not the entire year really, that economists, talking heads and commentators have been telling us we’re on the very doorstep of a massive recession. Even here at PfJournal we’ve been telling you how to prepare for a recession.

So, here we are entering the third quarter and things aren’t really looking that bad. Consumer spending is still pretty strong, employment is relatively stable, and the stock market is hitting highs left and right. It seems like we may have dodged the bullet this time.

Ah, but not so quick there bud! One of the “fun” parts of going through a recession is you’re never really quite sure when you’re in one or how bad it is until after the fact. Sure, there are economic indicators that seem to suggest one thing or another, but these indicators are never entirely accurate and are always subject to revision.

Just look at last months labor reports. To much dismay and hand-wringing, the non farm payroll employment figures for August that were released in September indicted that there were actually jobs lost. This was huge, and most people speculated that this all but ensured we would have an interest rate reduction from the Fed…which we certainly did a couple of weeks later.

Now, along rolls October and while the September figures come in pretty darn strong at 110,000, the August figures were quietly revised to 89,000. That’s about 95,000 jobs off! And, this from a report that is one of the most eagerly anticipated and watched each month. What are we supposed to do with that?

The fact remains, however, that the threat of a recession is still a very real possibility. Employment figures are good, but not great. Consumer spending is still positive, but not really as strong as it had been. Economists tell us that the mortgage crisis and the housing slump that has begun this year will only get worse as we go. That is, the worst is yet to come.

Still, we’ve been hearing this bad news for at least a year now. How do we really know where we stand? That answer is that you don’t really know how the economy is doing for sure, and you can’t really control it anyways. All you can control is your own financial picture. Whether we’re in a recession right now, standing at the doorsteps of a big one, or on the verge of a nice reversal, you’re still responsible for making the sensible and reasonable financial decision that affect your life.

Related posts:

1. No Recession for 2008?
2. Saving Money in a Recession
3. Good Things About a Recession?
4. To Invest in a Recession?
5. Recession Proof your Investment Portfolio