With the US election approaching, Americans are increasingly growing concerned that the economy may be sliding toward recession. And while things will certainly not be as bad as the 2001 “bubble burst” in the high tech sector, many experts feel a “minor” recession could already be affecting the US.
Determining whether we are actually in a recession or not comes down to how you define the word. Most economists define a recession as a period of negative growth that lasts at least 6 months. This means that it is entirely possible that the US is Already in a recession–we just don’t realize it yet because 6 months haven’t passed!
There have been signs that the economy is slowing down for some time, and some of the most troubling come from the high tech sector. The latest example of this is yahoo.com, which has announced plans to cut back the companies workforce by as many as 1500 employees, according to Diane Wong, a Yahoo spokesperson.
While the exact number of employees whose jobs will be affected has not been revealed, Silicon Valley journalist have estimated the number will be between 1500 and 2500.
Wong would neither confirm or deny those numbers, adding, “there will be some reductions in the workforce… it would likely be in the hundreds.” Yahoo currently employs nearly 14,000 people, most of which are located in the Silicon Valley area.
Besides yahoo.com, there have been other worrying trends in the high-tech community, and experts predict there will be additional layoffs from Internet technology and software development companies over the next several quarters.
While it is difficult to say for certain whether the US economy is in recession or not, it is clear that there are signs of a “slow down” in the economy that could affect both traditional retailers and high tech businesses.
Trying to get a definitive answer to the question of recession from an economist is a challenging task. Most agree that there are a staggering number of variables, and that it is very difficult to predict the beginning stages of recession in an economy. Traditionally though, periods of recession rarely lasts longer than 18-24 months, and often they are over within a year.
With the president and the congress already talking of “economic stimulus packages” to provide tax relief and help the country avoid serious economic woes, there is little doubt that we are at least in the middle of a serious economic “downturn.” Whatever that means…
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