Why is the definition for leaving recession and re-entering growth only 1 quarter of positive GDP growth?

MNSL answered 3 months ago …

I think current definition needs more thought.

The fallout from the financial crisis will continue to hurt consumer spending

Globally we cannot see any improvement in the job market in the short run and medium term. Many global companies down sizing their staff and retrenchment has just began in some countries. Some are speculating without any valid reasons.

Inventory for commodities are building up and we will see more and more volatility in commodity prices. Globally Oil consumption has come down. Until plants, factories and heavy industries begin their production fully, until airlines try to use maximum capacity, until commuters stop car pools, until job market improves and purchasing power improves there will be less demand for oil and other commodities.

If we want to see gradual improvement in the global economy, all types of cost should come down drastically. Lower cost will help many industries and we will see development in all areas. I do not think housing oriented development will have positive effect on the global economy in the medium to long run.

Purchasing powers of American consumers are very powerful. Can we expect improvement in purchasing power without generating employment? It is same in other global markets as well.
More or less, we will have W type of recovery. Some countries, some companies will benefit most. There are opportunities in every crisis.

Some banks will have edge over others. They will make excellent results in W type recovery. Some car, car rentals and airline will outperform their competitors. Similarity there are outstanding global poultry companies with return on equity more than 40%. Some companies in this sector will have return of equity more than 20% during next 18 months.

We will see gradual and slow Recovery. Some companies will benefit most. Few sectors will have continues growth in W type of recovery. These are the best sub sectors in the world today.
Finally, we have to pay attention on some negative developments in some emerging countries and countries with least affordable houses. First homebuyers should be very careful. If negative factors continue for another 12 months will see some sort of bubble again in some countries. This time next crisis will begin from another country. Currently some bubbles are developing in some countries without any fundamental reasons. This is very dangerous. I hope policy makers will take some positive steps.

Next four months is very crucial. We will see direction of many markets.

Whether we have recession or not we will see following:

Consumers will not spend much as before. They will mainly spend for basic food items. Surprisingly particular food item and sector has more demand in some countries thanks to recession and credit crisis. Some companies will have greatest profit growth during next 12 months.

Consumers will have less purchasing power. Inflation has not gone down much. In some case, inflation has gone up. However, consumers are spending in selected items.
Rapid rise in unemployment rate globally. How can we expect higher purchasing power?
Commodity inventory will build up rapidly. We will see more volatility in the commodity market. Look for change in the currency trend sooner than later.

In short, those who had robust earning in export should thank average and middle class American Citizens for their contribution. Mainly they used easy credit to purchase expensive items. We can just see how powerful these consumers are: They can send companies and banks bankrupt within the short period. There are some valuable consumers in other countries as well. They buy foreign goods using credit card and personal loans. I do not know how they are going to increase their purchasing power while having higher unemployment rate, higher mortgage(even after falling interest rate) and closing down factories and plants. Can we see any improvements in the job market globally?