Is the U.S. in recession — yes or no?

But, so far, that suffering is not the result of a recession. A recession is an economy that is contracting: that may yet happen. But since the last recession in 2001, the U.S. economy has been growing. So any talk about “the deep recession” we’re in just isn’t factually correct.

Unfortunately, for a variety of reasons in America today, personal prosperity and economic expansion aren’t the same thing. There are many serious problems with the way the rewards of the growing economy are being distributed. The gap between rich and poor continues to widen. As those at the bottom are hurting, the rewards of the expanding economy are going to the wealthiest: CEO's get bonuses for screwing up large corporations, lenders focus on profits without regard for the borrowers’ interests, tax cuts are funded with borrowed money. All of this is a real problem.

But it’s not a recession. It’s a problem with a broken tax system, increased concentration of wealth, misguided economic policies and financial deregulation run amok. Unless and until we understand what the real problems are, it’s hard to see how we’re going to find solutions.

Martin Feldstein intimated that if the depreciation of housing prices were to be anything like the appreciation of those same housing prices or greater than then the economy will be in a prolonged downturn. What is that depreciation rate of housing prices now?
— Dave, Newberg, Ore.

Real estate markets are very local, so the national averages may have little to do with what’s happening in your neighborhood. And there are different measures of house price trends; you can pretty much take your pick.

The National Association of Realtors focuses on sales of existing homes, one of the most widely watched measures. The price for an existing single-family home was $198,200 in March, down 8.3 percent from a year ago.

But keep in mind the data can be skewed by a change in the mix of properties. If sales of high-end homes stay strong, the median sale — the one in the middle of the list from top to bottom — may hold up well even though prices at the bottom are falling faster. 

New home sales are tracked by the Census Department. From a peak in March, 2007 the median price of a new home had fallen by 13.3 percent compared to a year ago.

The Office of Federal Housing Enterprise Oversight, the agency that oversees government housing finance giants Fannie Mae and Freddie Mae, publishes a House Price Index using data on on “repeat sales.” This index tracks prices of the same house over time, based on the mortgages on those houses moving through Fannie and Freddie’s books.

From a peak in April, 2007 to January, 2008, that index fell 3.7 percent. In February, the latest month available, the index bumped up by 6-tenths percent. Because OFHEO only tracks loans up to $417,000, those numbers may miss what’s going on at the high end of the market.

Then there’s the Case-Shiller Home Price Index (named for the economists who developed it) which is published monthly by Standard & Poor’s. The data tracks repeat sales of the same houses of over time but only in 20 of the biggest cities.

That index fell by 14.8 percent from a peak in July, 2006 to Feb., 2008, the latest data available. What’s most worrisome is that the price drop accelerated sharply between January and February, when the index fell 2.7 percent in one month. (The March index will be released on May 27.)

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