Effects of recession

Recession in us in 2008

I here to discuss about the topic which have been describe by the various people

About the recession which have been done in us in 2008 the financial crisis or the

Economy crisis that occur in 2008

These crisis had been lead in various problems in the whole world and the crisis is been is solved by many difficulties n I here to discuss all that problems related to the recession

and the crisis which we n everyone had  face it that time n still that recession is been effecting now a days !!!!!!

So for those people's who r listening about the word recession it's means that a period of economic decline during which trade and industrial activity are reduced and fall in a GDP,marked by highly unemployment and fall in retail sales or we can say that it is an significant decline in activity across the economy, lasting longer than the few months.

The National Bureau of Economic Research (NBER) describes it this way:

'A recession is a period of decline in total output, income, employment and trade, usually lasting six months to a year and marked by widespread contractions in many sectors of the economy.'

  

                                                                      

“Annualized GDP change from 1923 to 2009. Data are annual from 1923 to 1946 and quarterly from 1947 to the second quarter of 2009”.

The average duration of the 11 recessions between 1945 and 2001 is 10 months, compared to 18 months for recessions between 1919 and 1945, and 22 months for recessions from 1854 to 1919.

The biggest example of the recession is the great recession which occur in 2008 :

Recession	Date	PeakEmployment	Gdp decline	Charcteristics
The Great Recession	Dec 2007-June 2009	10% (October 2009)	-5.1%	The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States' largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Citi Bank and AIG, as well as a crisis in the automobile industry. The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package. The National Bureau of Economic Research declared the end of this recession over a year after the end date. The Dow Jones Industrial Average (Dow) finally reached its lowest point on March 9, 2009.

In 2008 the causes are

•  The economy shrank 2.7 percent. Initially, the BEA thought it grew 0.6 percent.
•  The economy rebounded 2.0 percent The initial release said it grew 1.9 percent. Everyone thought the Fed's rescue of Bear Stearns ended the threat to financial markets.
•  The economy shrank 1.9 percent, much more than -0.3 percent initial estimate.
•  The economy collapsed, shrinking 8.2 percent. The BEA initially said it only shrank 3.8 percent, although that was bad enough. For more details on all the revisions, see 2008 GDP.

In 2009 the causes are

• The economy shrank 5.4 percent. The initial estimate said it shrank 6.1 percent.
•  GDP growth was -0.5 percent, better than the initial estimate of -1.0 percent. 

There are various questions  are arises in our mind while we r reading this blog how this economic recovery ends or will this is occur in future generation or not ??????

The U.S. hit full employment in August 2015. , full employment has its own dynamics. It means energy firms looking to staff up are potentially competing with other sectors like construction for workers and raw materials, raising production costs that then have to be passed on .While the U.S. economy is less energy-intensive than it has been in the past, companies looking to become more efficient on the labor front may employ energy-intensive equipment or machinery.  The economy looks like it could go back in recession, if it ever came out of it in the first place.

   Recessions are not caused by a fall in consumption; they are caused by a fall in investment      spending.  If you doubt me, here is the Vice Chairman of the Federal Reserve stating that investment is the key to the business cycle:

"Although it makes up only about 10 percent of gross domestic product, business investment is a vital element of the U.S. economy, with important implications for a variety of broader economic issues.”

Why do businesses invest in new capital equipment? Two reasons: (1) to improve productivity of existing plants so profits increase, and (2) to expand capacity so profits increase. That is why investment tax credits for business have always worked to get the US out of recession, and worked spectacularly well to get us out of the 1982 recession.

Will recession affect our future or not?????

The financial impact of the 20072009 recession will reverberate into retirement for many working families, even those who did not lose their jobs. Average wages grew very slowly during the downturn, reducing lifetime earnings. Lower earnings leave less income to set aside for retirement and depress future Social Security and pension incomes. Although unusually strong wage growth in coming years could bail out younger workers, there is little recourse for workers now approaching traditional retirement ages. For those age 55 to 59 in 2008, the Great Recession will reduce average age-70 incomes by 5 percent.

Will it effect in IT sector??

Recession can come in any sector and when it hits it takes the whole economy down with it. As all sectors are interlinked, recession in even a single sector will effect every other one, some will be effected more while others will be effected less but all of them will have an impact. Let me take an example, India did not have a very good monsoon this year which will effect the food production leading to a low supply and high demand of food products. This will increase the prices of food items effecting the profits of FMCG sector. People will be unemployed as the companies want to decrease there costs in order to maintain profits. Since production is already low transportation companies will also be effected as they will not have the same amount of orders to be transported leading to strikes and imbalance in the sector. Since transportation is less, demand for petrol and diesel will also fall leading to recession in that sector. In this way other sectors like automobile, exports, insurance and hence banking sector will also get affected by recession. Unless the government takes some strict actions this will keep spreading like a virus and engulf all the other sectors as well.

At last I want to conclude that by this quote

“I am upset and completely disappointed in the government, the millionaires and billionaires in the U.S. See what's happening to the country? Look at all the health problems, the economy, the recession and crime.”

    If you enjoyed this post, I’d be very grateful if you’d help it spread by emailing it to                      a friend, or sharing it on Twitter or Face book. Thank you!

Next week I’ll post by some another problem  which effect our economic crisis and development growth.