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CEOs, CFOs, Accountants - U.S. Economy is in a Recession

The results of a survey released Friday show that a majority of Chief Financial Officers and Certified Public Accountants recently surveyed believe the U.S. economy is now in a recession.

A majority of CFOs and CPAs in the survey, done by the University of North Carolina at Chapel Hill's Kenan-Flagler Business School and the Durham-based American Institute of Certified Public Accountants, said they believe the economy has entered a recession. Some 62 percent of respondents said they were pessimistic or very pessimistic about the U.S. economic outlook over the next 12 months.

It's the third straight quarter that business executives predicted slowing growth ahead.

"It is hard to see much good news here," Mark Lang, a professor of accounting at Kenan-Flagler, said in a statement. "There were some hopeful signs in last quarter's survey suggesting that the economy might be bottoming out, but weakness persists across the board. The fact that firms continue to reduce planned growth in capital investment, staff development and employment is particularly troubling since it suggests that slowdown could have longer-term implications."

Only 10 percent of survey respondents expressed optimism about the economy.

The worsening economy appears to be having a dampening effect on the job market. Where I live, in the San Francisco Bay area, this region's CEOs are planning for layoffs ahead.

Bay Area CEOs Planning Layoffs in Next Six Months
Say State Won't Start to Recover For 12 Months - Approximately July, 2009

Marking a significant turn in the economy, for the first time in five years, more CEOs are planning Bay Area layoffs than those planning workforce increases, the Bay Area Council announced today in the release of its quarterly Business Confidence Survey. Indeed, 26 percent are planning layoffs in the next six months - the highest percentage ever recorded by the Survey, which began capturing data in 2001. Twenty percent of executives are planning to increase their workforce, while 51 percent plan to hold steady.

This region has held up admirably during the initial stages of the recession, and Silicon Valley companies have weathered the storm well, but pessimism over the current economy is still leading to layoff plans for this areas' companies:

"Considering the pain in other parts of the country, the Bay Area has weathered the current recession well, but with the planned layoffs - especially among our largest employers - we may yet suffer collateral damage," said Jim Wunderman, President and CEO of the Bay Area Council. "Despite the general pessimism, we are very pleased to see that Silicon Valley and smaller companies throughout the region are still strong and even hiring."

Republican-led recessions (see Dick Nixon's recession going into the 1976 Presidential election and George Bush Sr's recession leading into the 1992 election) have lead us to Democratic presidencies (Carter in 1976 and Clinton in 1992).

Since there is so much pessimism present now in the business community on the part of business CEOs, CFOs, and CPAs, the likelihood of the current recession continuing through this winter appears more likely. So does Barack Obama's election as a result of this news.


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Comments (6)

Herman:

Could another recession vs. no-proof-of-recession-yet battle be looming between Lee and a friendly troll?

Lee Ward:

I'm of the opinion that we began a recession back in the 4th quarter of 2007.

and the right wing lie used by trolls in the past -- that it takes two consecutive quarters of GDP decline to qualify as a recession -- is bullshit, and I've shown the Wall Street Journal (and others) disagree with that:

Recession redefined

It's a common (but mistaken) belief that a recession is defined by two consecutive quarters of negative GDP.

The actual working definition is "a significant decline in economic activity lasting more than a few months," usually seen in GDP as well as monthly data on job growth, income growth, industrial output and business sales. All four of the monthly indicators are flashing recession signs.

Also - there weren't two consecutive quarters of GDP decline in the 1991 recession either, but it was still declared a recession.

And here we have business leaders agreeing that we're in a recession in the post above.

GianiD:

When was the last time a Dim led Congress actually gave us a budget surplus?

Economy has tanked since Dims took over in 07. The 90's surpluses didnt happen until the GOP took over, and instituted the Contract with America. Pelosi promised in April 2006 lower gas prices, and they practically doubled since she took over(before retreating since the rescission of the offshore exec order).

Dims always claim to do a better job, but, is there any proof of it?

Lee Ward[TypeKey Profile Page]:

The president has the pen and the veto power over spending.

George Bush 43 ran the economy into the ground, tanking the US dollar in the process.

"Economy has tanked since Dims took over in 07. "

Name the spending measures passed by Congress since January 2007 which were vetoed by the President, GianiD, and then overridden by Congress, then explain how those bills (if there are any) contributed to the deficit.

Nixon/Ford handed a recession to Carter, and if I recall correctly Ronald Regan ran some budget deficits but regardless avoided a recession, then George Bush Sr ran us into the ground again, handing a recession to Bill Clinton who turned things around dramatically.

Junior Bush and the Republican-led Congress spent like drunken sailors for years, and the trillion dollars Bush and the Republican spent on the phony GWOT has done an admirable job if lining the pockets of Exxon and Halliburton stockholders, and has done nothing for the rest of us everyday folk besides create record inflation and a new recession.

gianiD:

When was the last time a Dim led Congress actually gave us a budget surplus?

Dims always claim to do a better job, but, is there any proof of it?

Lee Ward:

It's the President's budget, not Congress's - get informed.


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Publisher: Kevin Aylward

Editors: Lee Ward, Larkin, Paul S Hooson, and Steve Crickmore

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