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Hernando Today

Don't Call It A Depression

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By TONY HOLT

Hernando Today

Published: January 31, 2009

TALLAHASSEE - A recession is a period of reduced economic activity.

The current economy more than meets that definition.

In spite of the suffering, Americans are not seeing anything resembling a depression, economists have said.

While the term depression is considered rhetoric, there are several factors that must come to play before such a declaration can be made - such as unemployment at 25 percent or higher or a decline of real output at 10 percent or greater.

It might already feel like a depression for some - particularly those out of work - but one is not on the horizon.

"There's no litmus test, really," said economic forecaster Sean Snaith, who is the director of the Institute for Economic Competitiveness. "It all depends on the rate at which the economy contracts. This is not a depression. We're not going to get close to that. Nationally, our unemployment rate won't even get to double digits."

Labor statistics were not compiled until the 1940s.

Congress decided during the Great Depression the nation would be better served keeping track of workforce trends.

"Legislation was passed to begin collecting economic data so we could see these cyclical changes," said Rebecca Rust, an economist with the Agency for Workforce Innovation.

The government began compiling statistics long before computers came along and a few years before the first mechanical calculator was invented, she said.

Since then, the methodology has changed several times. More factors are considered and more keep being added to the formula following every census.

Hernando County, for instance, is now considered part of the Tampa metropolitan area. It was just another rural county prior to 2000.

The unemployment rate for Hernando County did exceed 20 percent at least once since the Great Depression. That was in June 1976 when it peaked at 20.7.

Hernando County exceeded 10 percent for the first time since 1991 in November 2008. It jumped to 10.9 the following month, making it the county with the second-worst unemployment in the state.

Comparing today's economy to that of the 1940s is impossible, Snaith said. Technological advances, population booms and a greater reliance on the international market are what make it so.

"It's so dramatically different nowadays," he said. "Making a comparison is really an exercise in futility.

"When a bank closed during the Great Depression, they locked their doors and that was that," Snaith continued. "Today when a bank closes, depositors don't even lose any money. It's the stockholders who lose."

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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