When Will the Recession Restart?

There are three periods of economic growth: Recession, Recovery and Expansion. Recovery is the period during which what was lost is found. Expansion is the period in time during which we have more of what was lost than when the recession began. If you want to through in a fourth stage you can add plateau. This would be a period of flattening of activity. These plateaus can occur during either a recession or an expansion.  The recession that officially started during 2008 and officially ended during 2010 is one that is based upon the Gross Domestic Product of the United States. It is the supposition of this author that the "Great Recession" was a combination of three recessions.

What starts a recession? Recessions can be brought about by man-made or natural events. I was a a worker in local government when Katrina struck. Hurricane Katrina sent devastation to the Gulf Coast and created a diaspora in Louisiana - a huge outbound migration. We saw a spike in gasoline prices that caused our local government to move to conserve money - reducing new employee hiring  and to slow refilling empty positions. A man-made recession could occur when there are factory lay-offs due to factory closings. Factory closings can happen when jobs are moved off-shore or when demand for products fizzle.

Housing Recession. People tend to focus on the Housing Crisis that occurred during the Great Recession. The slowdown began during 2005 and 2006 when units sold peaked during 2005 and sales prices peaked during 2006. Last month we saw weak data regarding housing starts and completions. Last Month we saw saw new home sales trending with the levels we have seen since 1992 and existing homes selling at a slower pace since 2013. We will see the release of new home construction data this Tuesday. We will see the release of New Home Sales September 26th and Existing Home Sales September 27th. We are still in recovery mode for new home construction, new home sales, and existing home sales. We may have peaked or plateaued regarding new home construction.

Jobs Recession. We saw peak employment during July 2007 prior to the recession. We almost exceeded the July workforce numbers during the Summer of 2008. We lost almost 15 million jobs at the depths of the recession. We added part-time jobs at the same time. This created a "Jobs Iceberg." What was detailed this past week was that unemployment hit men harder than women during the recession and that women have recovered better. We are in an expansion mode for jobs. The problem is that we have a failure to participate. We are not adding jobs as fast as we are adding workers. We may be seeing the beginnings of a participation recovery. We may be seeing a plateau in job creation. If the CES data for workers starts to drop this month be prepared for more to drops to follow.

Retail Recession. We are seeings all three stages of economic growth happening simultaneously in the retail sector. There are some sectors that are slowing. There are some sectors that are expanding. There are even some sectors that have not recovered from the previous recession. The August Retail. We saw year over year, same month sales decrease in gasoline, clothing, general merchandise and the electronics/appliances sectors last month. Furniture and Home Furnishings as well as Electronics and Appliance Sales have not returned to pre-recession levels. August Gasoline sales were lower this year than any August since 2006. We have seen back to back decreasing sales for August in the General Merchandise Sector. We are seeing expansion in Food and Beverage Stores, Food and Drinking Places, Automobile Sales, and non-store retail sales (Internet.) We are a consumption based economy. It is fairly obvious that the electronics and appliance recession, as well as the furniture and home furnishing sector recession, are tied to the housing slowdown.

GDP Recession. The Gross Domestic Product is slowing. Last month the preliminary data go GDP was released with hardly any fanfare,. We saw the annualized GDP rate revised down from 1.2% to 1.1%. This is rate the economy would grow during the next year if it grew at the same rate it did last quarter. The Real GDP grew at 1.2%. This is the growth that has happened over the past twelve months. Is it possible that the Reap GDP will drop below 1.0% during the third quarter of 2016? We will see the "final" revisions for the 2Q2016 data released September 29th. Some prognosticators are saying that we should see an annualized rate approaching or exceeding 3%. Eventually we will see an upward swing. Corporate profits have been declining for over a year. Sooner or later those profits go negative or the workforce does. 

All for sectors, jobs, housing, retail, and the GDP are positive right now. Retail has been shaky all year. Jobs have started showing weakness as of May and August. Housing has shown weakness and may be showing signs of a slowdown. If any one of these three sectors starts falter for months on end the GDP will follow.Some sectors of retail are not at pre-recession levels. Units sold for existing and new homes are not back to pre-recession levels.We just recently reached the same number of full-time jobs for men that we had during July 2007, which is okay of you ignore the number of people who have joined the labor force since that time