The end of year usually brings with it whimsical feelings of goodwill as the holidays draw near. It is also the time when the nation’s small businesses look forward to closing their books in the black. But 2008 is not that kind of year. At the end of November, the National Bureau of Economic Research (NBER) confirmed what most residents and businesses of the District of Columbia have been feeling for many months: the United States economy has been in a recession for a year.
The report stated that economic activity peaked December 2007 and has been on the decline since, ending a 73-month period of economic expansion that began November 2001, according to the Cambridge, Mass.-based committee of economists, which is responsible for dating the start and finish of economic downturns. The usual indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product.
NBER, however, defines a recession as a “significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.” The economy lost 240,000 jobs in October, as the unemployment rate rose to 6.5 percent. In November, employers slashed more than 500,000 jobs, the most in 34 years according to the Associated Press. As the region’s small businesses held back on hiring, the unemployment rate for the District of Columbia was 7.4 percent in October. It was 5.7 percent in October 2007, according to recently released figures from the US Department of Labor. The economy has been shedding jobs since January, while declines in manufacturing, retail sales and industrial production “met the standard for a recession,” the committee said in a statement.
DISB, in turn, has been feeling the pinch of the economy as the agency has received more complaints from consumers and businesses who have become victims of financial fraud, home foreclosures, insurance claim denials or cancellations, deliberately bad investment advice, and other actions that may be directly linked to the city’s poor economic conditions. DISB has had to offer more financial literacy events, attend more consumer empowerment events and ensure more visibility through the city’s many media outlets, including the Web. The agency has been on the frontlines, providing information and assistance, as it has increased the work of its consumer protection advocate and those administering consumer services, a sure sign of the times. And for 2009, DISB will continue to monitor the situation, working closely with the Council, other government agencies and nonprofits to continue providing assistance to those who need it.
For this month’s newsletters, even though the month of November is Health Insurance Awareness Month, we have presented stories on how the CSBS and NASAA are addressing federal regulatory reform, how lenders are seeking better RESPA rules, how DISB is helping states to prepare for e-filing of the SEC’s Form D, and DISB is preparing to license its 100th captive.
As always, we hope you will find something in our newsletter pages that keeps you coming back for more. Happy Holidays. We wish you a financially aware New Year.
Office of Communications