Guidant Financial Group Blog

So, if technically there is no recession, why does it feel like there’s one? Even though “the numbers” (0.6% growth in GDP) don’t indicate we’re in an official recession, the spending habits of Americans will tell you that we are definitely feeling some kind of economic depression.

The reality is that people base their spending habits on how they feel and what they’re experiencing in their own lives. The “experts” often seem too keen on focusing on the numbers and not on the financial anxiety of the public. Forbes.com (see Technically, No Recession [Feel Better?]) quoted Doug Elmendorf, a senior fellow at the Brookings Institution and a former Fed economist, as saying “There will be more attention paid to the number than there ought to be. . . . People are very focused on this question of whether or not we're in a recession."

So are the facts strong enough to outweigh the feelings? Is it possible that the numbers could offer some glimmer of hope – enough to encourage spending? Or are people too busy looking at their mounting debt to even notice?

Should we start defining a recession by how people feel and behave, rather than by the formal definition of a recession?