Traditionally, recessions have been defined as the occurrence of two consecutive quarters of decline in national output (Real GDP). The economic contraction of a recession can manifest through higher unemployment, decreased real incomes, less investment, lower consumption, lower industrial production and other factors.
The NBER (National Bureau of Economic Research) officially determines the beginning and ending of recessions and does not have to wait for a two-quarter decline in real GDP to call a recession if other factors are present. Typically recessions are officially announced as beginning and ending months after the fact. Recessions are less severe than depressions but can run the risk of turning into a depression.
Most economists do not see the risk of recession as imminent. However, an increasing number of economic indicators are worrisome. The U.S. bond and possibly the stock market appear to be overvalued by more investors and analysts. The latest estimate of first quarter GDP was 0.2 percent and would have been negative if it were not for an unusually large increase in inventories.
The next revision could push it even lower. The Atlanta Federal Reserve Bank recently estimated second quarter GDP at 0.7 percent; well below most private expectations. Industrial production is dropping, retail sales are weak, consumer confidence is suspect, net exports are feeble, and many state and municipal finances are strained. It would not take many surprises to push this economy into a recession.
Economic strains can be painful to both citizens of the world and citizens of the kingdom. But our attitude, outlook and future prospects should be different.
First, income and wealth are not our primary objectives. Our primary objective is to love, honor, trust and obey our King. We are told:
- "For the kingdom of God does not mean eating and drinking, but righteousness and peace and joy in the Holy Spirit" (Rom. 14:17).
Second, we are sons and daughters of the King of kings. The economy is not our source; the most high God is our source. We are promised:
- "If you remain in Me, and My words remain in you, you will ask whatever you desire, and it shall be done for you" (John 15:7).
- "The thief does not come, except to steal and kill and destroy. I came that they may have life, and that they may have it more abundantly" (John 10:10).
- "But seek first the kingdom of God and His righteousness, and all these things shall be given to you" (Matt. 6:33).
Third, economic recessions and other challenges can give us an opportunity to witness more effectively. The greatest church growth has tended to come during the most challenging times. We can more meaningfully model peace, joy, hope, courage, compassion and love.
Hurting people look for answers. We can point them to the ultimate answer in the person of Jesus, the promises in His Word, and the power of the Holy Spirit.
We do not know whether recession is imminent. We do not know what other challenges we may face in the future, their severity or their timing. But we have assurance that as citizens of the kingdom of God we can be victorious in all. Kingdom citizens are blessed regardless of the circumstances.
Dr. James Russell is a professor of economics and undergraduate chair of the College of Business at Oral Roberts University.
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