Are We In A Recession? Maybe So, But We Must Take Note Of Historical Trends and Cycles!

Are we in a recession? Regardless of the formal definition being obvious and present (two consecutive quarters of negative GDP growth) we have some extremely intelligent and successful people suggesting that we are in fact in a recession. Warren Buffet recently declared that the U.S. is "essentially in a recession", regardless of the lack of two quarters of negative GDP growth. The chief U.S. economist of JPMorgan investment bank says the country is in a short recession that started in January. The realities of inflation, record high prices for a barrel of oil and the high cost of gasoline, the housing slump with related depreciation and foreclosures, and the 63,000 job losses reported in February, 2008 simply can't be dismissed or ignored. In the past week, it has come to my attention that the Sharper Image has filed for bankruptcy protection and they'll be closing about half of their stores nationwide, as soon as possible. Lillian Vernon Corp. has also filed for bankruptcy protection. I heard from my friend in California that Wickes Furniture and Levitz Furniture, some pretty big names in furniture retailing in the state, recently filed for bankruptcy protection. Clearly, consumer spending is down.

So what does all this mean to you and me? It may be easy for me to say this, but I would suggest that you don't think about all of this in terms of today, tomorrow or next week, but rather think of all of this with a mindset of foresight, specifically thinking in terms of 2008 and 2009. Why? Well, we should recognize that all of this economic turmoil is cyclical. The fact is, only 8 of the last  22 recessions since the year 1900 have lasted longer than 1 year. What goes up will come down and yes...it will go up again. If we think in terms of "2008 and 2009" and consider the statistics above and the concept that this stuff is historically cyclical, then a perfect case scenario might possibly have us bottoming out in this recession sometime in 2008 and recovering in either late 2008 or early 2009.

We are a nation of resilient and optimistic people. We are a nation of brilliant business people and hard working entrepreneurs. We will survive and we will get through all of this and eventually thrive again.

Recognize that the mass media successfully executes a daily agenda of sensationalizing all that is negative and all that perpetuates "doom and gloom". When you know this and are conscious of this as you absorb the daily media's negativity, you will be less susceptible to letting all of this stuff depress you or get you overly excited and nervous that "the sky is falling".

Take prudent measures now, to ensure your survivability. Be frugal, build up your savings, live at or below your financial means and take the time to appreciate what you have. I'm not saying you should become complacent or accept a life of mediocrity, but I am suggesting that it is often healthy to take a moment to breath, and slow down and reflect on all of the wonderful aspects of your life that you have been blessed with.

While nationwide economic data is relevant, up to a point, it does not always apply to your local economy. Each major metro area will have its own socioeconomic blueprint and related strengths & weaknesses.

Should you find your business slowing down, this is the best time to take inventory of your personal strengths and weaknesses. Sharpen your saw, further your education, nurture your relationships, care enough about your career path and your clients to be the best in your region or zip code. Be the best, the smartest, the most likable, the most professional and the most deserving of a fresh referral from a friend or past client. Try harder. Persevere. Trust in yourself and ride out this cycle so you can be at the top of your game throughout our inevitable economic recovery.