Recession Hits Home

There is an old wisecrack that "If s/he is laid off, it is a slowdown; if you are laid off it is a recession, and if I am laid off it is a depression." In this regard, I am now feeling the recession. While visiting her in the San Francisco Bay area, my oldest daughter, Meagan, a 36-year old single mother with a three year old son, was laid off from her CA-state paid job as a counselor to disturbed teenagers, this following nearly being evicted when her landlord was foreclosed on and was evicted after his subprime mortgage (obtained in 2005) was reset, on top of which her car went blooey while we were there (I have just returned to Virginia). Weird that these days local government jobs are among those most vulnerable in the current downturn, although that sector of government has always been more pro-cyclical than the federal government.

Ironically, besides visiting family members, I was also there to attend a conference at the San Francisco Fed (Society for Nonlinear Dynamics and Econometrics). The redoubtable Jim Hamilton of econbrowser gave a talk (summary figures available at his blog) on state diffusion of recessions. The last two have followed different and interesting patterns. The word on the current one is that while some states are being hit harder, they are all going down simultaneously, no diffusion from state to state, with him saying it hit in last quarter, after a deceleration beginning in second quarter last year. Oh yes, I also heard that at least at the FRBSF they do not use the word, "recession." The preferred term is "adverse economic conditions."