The recession is no doubt hurting you, perhaps badly. Your sales may well be down. Maybe you've even lost your job. Whatever your troubles, you may safely blame them on the recession.
After all, most of the CFOs questioned in a recent poll agree that the U.S. is in a recession; among the general public, 76% said the U.S. was in a recession six months ago, and other polling suggests most people believe things have grown worse since then....
Just one problem: There isn't any recession. The latest figures show that we clearly were not in one as of midsummer, whether you use the rule-of-thumb definition - two consecutive quarters of GDP shrinkage - or the looser concept of a sustained and significant economic decline.
The economy shrank marginally (-0.2%) in the fourth quarter of 2007, but otherwise it's been growing steadily for years. In the most recent quarter it grew at a vigorous 3.3%, fueled not by government stimulus checks but by a strong rise in net exports. The OECD has just raised its forecast of U.S. growth for the full year from 1.2% to 1.8% - not blistering, but still the fastest growth of all the G-7 countries.
So if we're not in a recession, why does everyone think we're in one? Partly it's because in a global economy, it's possible to produce economic growth that many people don't feel. The rewards of economic growth are going disproportionately to those with the best educations, bypassing many of the more numerous workers without college or higher degrees. In some cases, well-educated workers like teachers have also missed the rewards of growth. Even a company's stock price that rises with global growth doesn't benefit Americans as much as it used to, because ownership is dispersed much more widely around the world than before.
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