For the past few weeks, the question raised about the economy is whether or not the United States is in a recession.The National Bureau of Economic Research determines the economic status of the country.
The NBER has not officially declared that the nation is in a recession, but according to CNN.com, the group typically does not declare a recession for anywhere from six to 18 months after it begins.
Kevin Rogers, interim associate dean for the College of Business and Industry, said the U.S. economy is growing at a below average rate and may actually be declining.
“It is likely we are in a recession now, but we won’t know for certain until more data is available,” Rogers said.
Randall Campbell, assistant professor of finance and economics, said a recession is most often defined as two or more quarters of declining real gross domestic product.
The real GDP is the value of all goods and services produced in the United States.
“[Recently], the economy has been slowing, but to my knowledge we have not yet had even one quarter of declining real GDP,” he said.
The state of Mississippi usually lags behind the rest of the country, Campbell said.
“In general, we lag behind in GDP and my guess is the economic slowdown is currently affecting us maybe a little more than other areas,” he said.
Campbell also said education can help the economy.
“In general, Mississippi needs to increase education levels in order to increase productivity and compete with other states,” he said.
Finance and economics instructor Andrew Luccasen said, in addition to the recession, the decline of housing prices has contributed to a decline in wealth among Americans.
“This housing decline is not as severe in Mississippi relative to other states,” Luccasen said.
Rogers said the impact of the decline of housing prices is a big concern.
“Home foreclosures and potential foreclosures will discourage consumer spending and reduce the availability of credit,” he said. “There effects are having a negative impact on Mississippi and the rest of the U.S. economy.”
The government is trying to help out the economy, he said.
“While the U.S. economy can eventually get out of a recession on its own, the government is using both fiscal policy and monetary policy to speed up the process,” Luccasen said.
Campbell said the Federal Reserve System has cut interest rates several times recently.
“[The interest rate cuts] tend to spur things like home sales and business investment; however, rates are pretty low so there is not much room to cut [rates] any further,” he said.
The Fed is also talking other measures to help improve the economy, Campbell said.
“There is a one-time payment to households coming this summer with the hopes of encouraging consumer spending,” he said. “However, if consumers tend to save this money instead, there will be no effect.”
Luccasen said with the current trend of declining GDP, a recession is expected in the near future.