Gross Domestic Product is one of the measures used to define an economic recession or recovery.
But what is GDP? Planet Money’s Adam Davidson goes to the grocery store with economist Simon Johnson to find out the answer.
This is the first of a series of videos Planet Money is doing with Slate.
Mark Herren
Clearwater Paper Mill in Lewiston, ID
Coeur d’Alene-based Idaho Forest Group is purchasing the Clearwater Paper sawmill in Lewiston for $30 million. The Lewiston Tribune has been reporting on the sale throughout the day. The Tribune reports the sale includes Clearwater Paper’s sawmill, planer mill, dry kilns and finished inventories.
“Speculation about the deal had been circulating for more than two weeks in Lewiston. Clearwater Paper spokesman Matt Van Vleet had declined to comment on the pending acquisition multiple times, dismissing the speculation as rumors.” – Lewiston Tribune
After several weeks of reporting on the Idaho housing market, it’s impossible not to notice just how many of the people who have lost their homes in the downturn are real estate agents and builders, or do other kinds of work related to housing. In our first broadcast story, for example, we met Carmel Crock, a realtor who lives in Boise. In the midst of the boom, she made financial decisions that counted on the housing market’s continued strength. She refinanced her home in the expectation that her income would keep rising, allowing her to manage a higher monthly payment.
David McNew / Getty Images News
New home construction stalled at this California development in 2008.
Crock says when her income fell and she found herself in the middle of a financial mess, she wasn’t on her own. Many people she knew professionally were also having to figure out how to negotiate short sales. “Unfortunately, I had realtor friends, long-time acquaintances, builders who were going through the same thing,” she says. “None of us were doing this alone.” Continue Reading
Molly Messick / StateImpact Idaho
Ben and Lori Jensen of Meridian say they were stunned to receive a lawsuit from their bank months after they lost their home to foreclosure.
Month in and month out, Idaho’s foreclosure rate remains one of the highest in the nation. For many, losing a home is the definition of hitting bottom. But some former homeowners are finding themselves in an even tighter spot than they thought possible. They’ve lost their homes and wrecked their credit ratings. Now lenders are pursuing them for the debt that remains.
The day Ben Jensen found out that he and his wife, Lori, were being sued for more than $140,000 is fixed in his mind, like the slow-motion moments before a car crash. It was a weekday afternoon, and he’d just come home from work. “My wife and I were standing in the kitchen talking,” he remembers. “There was a knock at the door, she went to get it. And as she was walking back she had a really perplexed look on her face.”
Some Idaho business owners say the same thing: recession or recovery, it doesn’t really matter what it’s called, business is slow. Last week we talked with Idaho economists about this idea. Boise State University economics professor Don Holley says labeling trends “recession” or “recovery” does make a difference. “If we were still (technically) in a recession, if things were still going down, it’d be much worse” Holley says. Still, he points out, two years after the recession, Idaho isn’t back to economic productivity seen at the peak in 2007.
Junkyard Bistro
Mary Whalen and her husband have owned Junkyard Bistro for 4 years.
Mary Whalen co-owns Junkyard Bistro, a small restaurant in Salmon, Idaho. She feels like the recession is hitting her community now. “Our business is way down compared to what it was in 2009,” Whalen says. She says businesses in Salmon rely on the summer tourism season to make ends meet, and because of a long, wet spring, the season didn’t really start until July. “It (business) usually stays strong until November,” Whalen says, “We’ve already cut back our staff.” The move is about six weeks premature. “I almost thought the recession might help us because people weren’t traveling out of the country, but doing local trips,” Whalen says. “You can call it whatever you want to, business is down.” Continue Reading
Idaho’s unemployment rate ticked down two-tenths of a percent in September, slipping below the national rate for the first time in nearly a year. The state’s seasonally adjusted rate is at 9.0 percent, nationally it’s at 9.1 percent.
Matt Stiles / StateImpact NPR
27 of Idahos 44 counties recorded lower September unemployment rates than in August
Idaho Department of Labor spokesman Bob Fick says many sectors are performing better, or about the same, as they were during Idaho’s economic expansion from 2003-2007. “That suggests that we really have hit the bottom and may finally be starting to, the economy may be starting to claw its way out of the recession into recovery,” says Fick. Continue Reading
Q: What is a recession?
A: When you talk about a business cycle, you have a downturn and an upturn. The downturn is the recession and the upturn is the recovery. Once you hit the bottom and start to come up, you’re in recovery, but you certainly haven’t gotten back to where you were before. Even a year and a half later, 2 years later, we’re not back to where we were in 2007. So, although we’re technically in a recovery, we certainly haven’t recovered back to where we were before. The downturn, the bottom, we’ve passed the bottom – but nowhere close to where we were.
Q: Â Are you seeing signs of recovery in Idaho?
A: Employment has leveled off and has started to increase. Home sales have stopped going down as fast as they were and have leveled off – in some places they’re starting to increase. Housing prices aren’t falling as fast as they used to. Auto sales are up from a year ago – they’re still half of what they were 3 or 4 years ago. So yes, we see signs of recovery. Continue Reading
Jeffrey Coolidge / Getty Images
Idaho’s economy, like the national economy, has technically been in recovery mode since June 2009. That’s when the latest recession ended. It lasted 18 months, from December 2007 until June 2009. The National Bureau of Economic Research is the group of independent economists that makes these declarations.
Here at StateImpact Idaho, we’re trying to find out if these declarations really mean anything. So we spoke with three local economists. Each agrees a recession is loosely defined as a prolonged downturn in the economy. It’s when gross domestic product doesn’t increase over a period of time and the production of goods and services stalls. Continue Reading
Here’s a closer look at Idaho’s 2010 private sector gross state product, in millions of dollars.
[spreadsheet key=”0AiLU6Cs5LWZIdHJNaVpiZWVNV1JzaHhvZWVRQkJFb3c” source=”U.S. Bureau of Economic Analysis” sheet=0 filter=0 paginate=0 sortable=1]
According to the Idaho Department of Labor, the value of all goods and services produced rebounded in 2010 by 3.3 percent. Losses were still recorded in the construction, real estate and management sectors.
We’re on a mission to find out from economists, business owners, workers and everyone in between what the words Recession and Recovery mean in Idaho. Here’s what three economists had to say.
State of Idaho
“It’s almost like economists who are focusing on this narrow view of what constitutes a recession have almost made themselves irrelevant. Most people don’t feel like we’re recovering.”
– Mike Ferguson, Idaho’s former chief economistBoise State University
“We’re in a recession. In the popular use of the term, we’re still in recession, even though the economy isn’t in decline – we’re still in recession, we’re not back to where we were before.”Â
– Don Holley, Boise State University Economics ProfessorKevin Quinn / Spokesman Review
“For the average person, it’s hard to tell the difference between the recession and the recovery because it’s not having that much impact on wages and salaries, their ability to find jobs and their wealth.”
– Kathryn Tacke, Regional Economist, Idaho Department of Labor
Tell us what Recession and Recovery mean to you.
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