While walking out of a delicious local lunch spot this afternoon I was shocked to find this headline on USA Today: "GDP down 3.8% in Q4, biggest drop since '82". I grabbed the newspaper stand and yelled "what?!"
I know there is a recession going on. I know that unemployment is at 7.2% (and is probably much higher when you account for the discouraged worker population). I know last quarter had negative GDP growth-- but it wasn't even down by a full percent. I admit, I've been on vacation from school and enjoyed a very relaxing winter break without newspapers, so I'm out of the loop--but this just seemed crazy. I paused for a second and it really hit me-- this is... bad.
It's funny what it takes to make you realize that times are really tough. A day barely goes by now where you don't hear about somebody's cousin, dad, sister, or whomever has been laid off. There are record numbers of people signing up to receive unemployment benefits. "About 588,000 workers applied for jobless benefits last week, up 3,000 from the prior week and 61% higher than a year ago..." It appears we all might need a bailout.
The media loves to blow things out of proportion. If you check out the stats a little bit, you'll find that our current situation isn't that close to the situation in 1982. As you will find in this very useful graph, the quarter USA Today referred to in 1982 had -6.2% GDP growth. That's quite a bit different than -3.8%. Clearly -3.8 is no picnic, but it's not exactly the Great Depression either.
You've really got to wonder when this is all going to end. It's like a bad dream you can't wake up from. I've heard mixed reports about the housing market-- MSNBC says local markets are stabilizing, while Business Week is still forecasting doom for housing in 2009 with a turnaround coming in 2010. The housing market is part of what got us into this mess in the first place, and I think a lot of people are looking to it to get us out of it. However, I'm afraid it's going to take a lot more than the bottoming out of housing prices. People need to be able to not live in fear of losing their job at any moment. Credit needs to become available not only for individuals, but also for businesses. We need to stave off deflation, as that would make this situation downright dismal. We've got a lot on our plate.
In some sense, I feel like the current economic situation isn't worth worrying about because there is nothing that any one normal person can really do about it. Make lemonade-- as my boyfriend Chris always says when I get stuck in a less than desirable situation. This could be a good time to stop and savor what is really good in life-- family, friends, laughter, etc. Even on your worst day, there is always something to thankful for.
