How have Americans been reacting to the non-recession ? [A "recession" which doesn't fit the economists' definition but seems a lot like one to the people ] How have spending habits changed?

Here's a curiosity noted in Britain. Two chains of supermarkets, Aldi and Lidl, sell basic items and a limited range of branded goods very cheaply. They make their money by not carrying an enormous range of brands and by persuading people to buy in , comparative, bulk. Both have noted a sudden increase in sales to what the economists call ABC1s, higher earners and 'professionals' , who would not have thought to visit them.Previously, and predictably, their market has been at the other end of the scale.
That's understandable: everyone wants to save money now. Aldi claims that it can save a household 30 per cent against standard supermarkets on a 'shop' of £100.

However the 'top' supermarket chain, Waitrose, which aims to capture that richer end of the market, claims a great increase in sales of its most expensive food items.Sales of its top of the range 'ready meals' and its top meats etc are up 40 per cent. The reason, they think, is that the buyers are buyers who would eat out at restaurants a lot, often in groups of friends. When they stop doing that, they eat at home and entertain at home but they want the very best quality,the most luxurious or the most expensive stuff to do so. So they save money on food but not in the obvious way.Waitrose is losing some customers for essentials and basics but selling more of the top stuff. The customers may well be the same people in both kinds of supermarket.

What we haven't had is a striking reduction in petrol [gas] sales.That's easily explained: British people never do the mileage that Americans do, the cars are more economical of fuel and when about two-thirds of the pump price is tax an increase in the price of crude doesn't have quite the same obvious impact on the drivers' wallets.

Everyone I know is cutting back. Even a friend who eats his evening meal (every day) out is now going to cheaper restaurants.

I do want to take the time here to explain that what most people think of as the requirement for a recession is not, according to the group that the government and most economists go by, really a requirement. I explained this once here, but it pretty much got ignored. Simply put, a quarter of economic growth does not imply "real growth." That factor just doesn't account for population growth. Whaen one considers population growth, it is easy then to understand that the economy almost always grows, even if individuals are spending a bit less.

Another factor not usually mentioned by those wanting to have bush's economic policies shown as good is which income bracket is enjoying the economic growth. Many wealthy people actually not only survived the 1930s Depression, but prospered. (While I haven't looked at the figures, I suspect that there might have been a few quarters of economic growth in the 30s.)

A third factor, again rarely mentioned, is inflation. A series of quarters "on the edge" of a raw numerical downturn may actually look better because, even though fewer products have been bought, inflation has shown an increase in dollars spent. I know I spend a great deal more of my (fixed) income on groceries, but I assure you that I am not buying steaks and lobster. (Had I spent this much 5 years ago, I could have bought steaks and lobster.) I am buying more rice and pasta. (I count Ramen noodles as pasta. )

Raw numbers often don't really tell the story. George Washington received, at best, some 36,000 popular votes and 70-something electoral votes. The current office holder got 62,000,000 popular votes and 271 electoral votes. Does that give an accurate idea of which of the two was more popular?

As explained in another forum, we may discover after the fact the we have been within the technical definition of a recession. The fourth quarter 2007 numbers were revised downward and reflect a small negative growth. First quarter 2008 figures, thus far reported as slight postive growth, may also be revised downward. The timing for this will most likely be when the next quarterly results are released in October.