Recessions are part of the business cycle. They are relative, and they are temporary. They can last up to 18 months.
The Great Recession, which began with the Financial Crisis of 2008, has been longer and harder than most. Here in Mississippi, we were late to the party. The effects of the contraction hit us long after the rest of the country.
In technical terms, a recession is measured by two consecutive quarters of economic contraction. A wider view of the situation can be taken by looking at many economic indicators, including employment. Regardless, a classic recession is not just a short-term dip or slowdown. It’s a persistent contraction lasting over several months.
So, I was quite surprised to hear state economist Dr. Darrin Webb declare that Mississippi had slipped back into the abyss sometime in April. Webb said, “The state’s economy has not performed as well as the nation.” Couldn’t he have said the same thing about the last 20 years?
He acknowledged that the state data is limited and that there is no classic way of defining recession at the state level, but he still says we’re there. His basis for this pronouncement? An unemployment rate that has ticked up in the last couple months.
I would suggest our situation is not quite so cut and dry. Webb acknowledges that our housing and auto sectors have seen improvements. He cites an increase in sales tax revenue. How does that happen when we’re in recession?
As I look at the unemployment numbers, I see dramatic improvements from just a year ago. If I study the data by county, I see population centers experiencing improvements, while rural areas are stuck in the mud. It just looks like the same old story to me.
Webb goes on to claim that the current recession has its roots in our poor education system and high teen birth rate. I don’t call that recessionary pressure. I call that a long-term condition that is just the status quo in Mississippi.
Was this pronouncement simply a way to give legislators the ammunition they needed to say “no?” C’mon, Dr. Webb, how about a little more science and a little less opinion?
>> Nancy Lottridge Anderson, Ph.D., CFA, is president of New Perspectives Inc. in Ridgeland — (601) 991-3158. She is also an assistant professor of finance at Mississippi College. Her e-mail address is email@example.com, and her website is www.newper.com.