Hunting Happiness

The official definition of a recession is like the word “peruse”. People confidently misuse or incorrectly state the definition of both. Peruse means to read or study in great detail, not to “flip through” or “skim”. See Webster’s.com for confirmation. Similarly, a commonly-stated definition of recession is two or more consecutive quarters of real GDP decline. The National Bureau of Economic Research (NBER) officially declares recessions and their website says:

The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement on how the NBER’s Business Cycle Dating Committee chooses turning points in the Economy and its latest memo, dated 07/17/03.

However, both recession and peruse are so commonly misused that the incorrect definition of both has become a de facto definition.

CNN Money has a running story with examples of how various individuals and families are being affected by the economic slow down. I keep a pretty steady watch on the foreclosures in our neck of the woods looking for good opportunities and I would say the pace is certainly holding steady if not inching up. Both of us have also seen the effects around us including substantial layoffs our day jobs. But I have to say that we have not seen any direct effect on our personal financial situation (knock on wood). We’ve noticed increased gas prices but the overall affect on our budget is negligible. We have fuel-efficient vehicles and have fairly short commute distances for our area. Even if gas or grocery prices were to double it would not be the end of the world for us. Unfortunately, many folks are not as fortunate.

Have you had to make any substantial adjustments to your life?