Saturday, August 11, 2012
How This Recession Compares With Prior Recessions
This article does a nice job of showing key components of the economy, and how they have performed in this recession versus historical averages. One key difference is that government spending has decreased in the recession. That reflects the cutbacks in spending at the state and local level in this recession. Curiously, corporate profits usually rise in recession along with cuts in the payroll. They have risen more rapidly in this recession than in previous recessions. Recessions seem to be good for corporate profits. Small businesses have not been as lucky. They supply products and services to corporations and individuals and they are affected by a drop in demand from corporations and consumers.