TUCSON, Ariz. (KGUN) — With speculation on whether the country is headed toward a recession, University of Arizona economistGeorge Hammond weighed the likelihood of whether or not Arizona itself was poised to avoid one.
Hammond says the state's strong growth and lower cost of living may be factors that help Arizona avoid recession, though he also says it will be a close call.
Through all the discussions about whether or not recession is on the horizon, some may be asking one very fundamental question: What is a recession?
According to the National Bureau of Economic Research (NBER), the definition of a recession is straightforward: Recession is marked by a "significant decline in economic activity that is spread across the economy and that lasts more than a few months."
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Conventional wisdom will often interpret a recession as two consecutive quarters of falling real GDP, according to written material from the White House.
The NBER, however, breaks down economic activity with a multi-prong view before measuring the sum of the parts and determining whether a recession is taking place. Factors taken into account using data from FRED Economic Data can include:
- Industrial production
- Manufacturing and trade industries sales
- Personal income (minus government transfers)
- Consumer spending
Overall, it's an analysis of peaks and troughs in the nation's economic big picture.
In his paper, Hammond says "the outlook for Arizona, Phoenix, and Tucson depends in part on national and global economic events" though his long-run forecast shows the state growing faster than the national average.
It's not a sure-fire sign the state will avoid the recession altogether. He also says the growth should slow compared to the previous 30-year period.
"Risks to the long-run forecast revolve around the labor force, productivity, investment in private and public physical capital, and natural resources," Hammond writes.
Craig Smith has more from Hammond and Arizona's potential for a recession in the future: An AZ recession? Odds are about 50-50
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Anne Simmons is the digital executive producer for KGUN 9. Anne got her start in television while still a student at the University of Arizona. Before joining KGUN, she managed multiple public access television stations in the Bay Area and has worked as a video producer in the non-profit sector. Share your story ideas and important issues with Anne by emailing anne.simmons@kgun9.com or by connecting on Instagram, Twitter or LinkedIn.
