The standard newspaper definition of a recession is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters.
This definition is unpopular with most economists for two main reasons. First, this definition does not take into consideration changes in other variables. For example this definition ignores any changes in the unemployment rate or consumer confidence. Second, by using quarterly data this definition makes it difficult to pinpoint when a recession begins or ends. This means that a recession that lasts ten months or less may go undetected.
By the other metrics tagged in the quote’s second paragraph — namely, unemployment rate and consumer confidence — this recession is most emphaticallyl NOT over. Consumer confidence dipped in September and October, and unemployment rates have continued to climb by fits and starts all year long with decreases for both August and September as well. Many economists and even President Obama continue to predict that unemployment rates will top 10 percent by the end of the year or in the first quarter of next year (of course, with the current rate at 9.8%, that’s no huge jump in rates either).
What does this mean for IT workers? Repeat my mantras from earlier postings on this very same topic. For those currently employed in IT that goes something like this: ”Be cool. Stay put. Hone your skills. Wait for things to improve.” For those who want to work in IT, either on a first job or to get themselves back to work, it sounds like “Be cool. Look harder. Hone your skills (and consider some training or back to school). Wait for things to improve.” Given that the employment market is normally quiescent between Thanksgiving and New Years (except for part-time seasonal employment) that definitely means that “hunker down” remains the watchword of the day.
Please join me in wishing for improvement and real growth in IT jobs for 2010.]]>
I have to agree that while technical measure may be important to economists, and that while leading indicators may signal the end of a recession, it’s only when trailing indicators — most notably, employment and consumer confidence — participate in an upswing that the “person on the street” starts to put some credibility into claims that the situation is improving.
My understanding is that we have anywhere from six to twelve months still ahead where other signs of improvement will begin to appear here and there, leading ultimately to a general sense of better times and conditions. But until the IT employment situation turns around and actual job growth begins to show itself, I don’t think most people (including myself) will be feeling too sanguine about the state of the economy and the technical status of the recession or any subsequent (technical) expansion.]]>