Experts declare U.S. in recession for past year

The elephant in the room is actually real.

Capping months of speculation about a puttering economy, the National Bureau of Economic Research announced Monday the United States has been in a recession for about a year. The NBER is the committee that officially determines the U.S. business cycle.

IU experts and students said the news confirms what many already knew, but it didn’t ease their concerns about the economy.

Alpha Kappa Psi president and senior Tim Daniels said he is worried about his future.
Daniels will graduate in a couple of weeks, and although he has a job after graduation, he said he frets about the job market and his own position.

“I’m more worried about keeping it, and being recently hired, I’ll be the first on the chopping block,” Daniels said.

The Business Cycle Dating Committee within the NBER said they determined Friday the end of the expansion period and beginning of the recession, according to a report released by NBER.

Professor and chair of the Department of Business Economics and Public Policy in the Kelley School of Business, Bruce Jaffee, said a recession, in general terms, is a downturn in overall economic activity.

Larry Davidson, professor of business economics and public policy in the school of business, said the announcement could be considered good news because it puts to end months of speculation.

“It’s not a secret that employment has been falling and the unemployment rate has been rising,” Davidson said.

Junior Melissa Elston said she is already worried about her life after college.

Elston, a psychology major, said she hopes the economy turns around by the time she graduates.

Junior Tyler Nowak said he does not think the recession has impacted him greatly because his parents financially support him. He said he plans to go into the medical field, which he said is always in demand.

But Nowak said his father is in the steel industry, which is not secure. If the recession affects his father enough, Nowak said he might need a part-time job.

Davidson said the economic environment is different this time because energy problems and increasing food prices impacted the economy at the same time.

The recession is also unique because it is longer than the last recession, Jaffee said. The last recession lasted nine months, while this one is already going to be a year long.

The report stated the expansion in the 1990s lasted 120 months. The past expansion, which began in November 2001, lasted 73 months.

Jaffee said he thinks the economy will start to look better by mid 2009. Still, Davidson said he is concerned about the recovery process, which he said he thinks will be slow.

For now, students such as Elston will have to do what they can to prepare for life after college where the economy is uncertain.

“I’m making sure I get all the internships ahead of time to build up my resume,” Elston said. “Hopefully that will be enough.”