Free Markets, Free People


Recession Over? Not Yet Says NBER

Some indicators are looking better, but others, not as good:

While the U.S. economy is showing signs of stabilizing from a recession that started in December 2007, it’s “way too early” to say the contraction is over, said the head of the group that officially makes the call.

Gross domestic product estimated on a monthly basis “had a trough earlier this year, but it is way too early to say that it is a true trough rather than a pause in a longer decline,” said Robert Hall, who heads the National Bureau of Economic Research’s Business Cycle Dating Committee.

So while you continue to hear the happy talk about economic recovery, the experts aren’t yet ready to say whether we’ve bottomed out or are just taking a breather in the midst of a longer decline.

~McQ

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15 Responses to Recession Over? Not Yet Says NBER

  • We’ve already seen the future via QandO…
    Layoffs coming @ Chrysler and GM will have a ripple effect in many ancillary industries,  so unemployment has no way to go but up.
    Lotsa money being printed to cover the stimulus, so inflation will be rising dramatically.
    The only question is, can “The Big O” exceed Bubba Jimmah’s record “Misery Index” figure of 21.98% ?
    Everyone say it loud…
    Yes he can!

  • And with everything still in flux, we still have the American consumer sitting on the sidelines waiting for the storm to blow over so he can start spending again.  And to add to it all, with General Motors and Chrysler becoming Government entities and treating bondholders like pariahs, you will see an unwillingness by the marketplace to invest in any company or venture that has the government stink on it.

    As someone once said, “Pass the popcorn!  This is REAL entertainment!”

  • not even close.  Although there might yet be a small uptic because of all the spending. But that will quickly be crushed by  higher energy prices. Followed by rampant inflation.

  • There are no signs that the economy is improving. Why? Because of REAL UNEMPLOYMENT.

    The “unemployment rate” mentioned today is 9.4%. That’s bad, but what is far, far worse is that that number does not count the people who have GIVEN UP on looking for work. With them figured into the mix, the real unemployment rate is actually 16%. Yep, you heard that right: 16%.

    And when the “unemployment rate” that the maladministration likes to tout along with their willing lapdogs in the media reaches 10% by August or before, the real unemployment rate will actually be close to 20%. That will mean that 1 out of every 5 people in this country will be out of work.

    And that equals doom for the Democrats in the 2010 election. Period, end of argument.

    Jimmy Carter, your second term in the White House is worse than your first.

    • Wishful thinking on your part (how correct were you in 2008?)   First, the GOP has to get away from the extremists who have marginalized themselves with their silly rhetoric.  Luckily for the Republicans, they are recruiting some good moderate candidates; that’s what it’ll take to win.  They can probably kiss 2012 goodbye to Obama (like FDR, all he has to do is appear he’s doing something, and he’ll get credit — and he may end up with a Reagan like re-election year, a  rebound).   The GOP should gain in the House some seats in 2010, but if you look at the races they’ll probably lose ground in the Senate.  If Obama can hold in 2012, that’ll give the Democrats six years of dominance.  If the economy is truly rebounding, the best the GOP can hope for is probably a start to recovery (Presidential level — and gains Congressionally) in 2020.  If the economy truly is in a long term funk, and the US is truly losing its status as a dominant world power, the Republicans have a chance in 2016.  Until then, unless lightning strikes, they’ll be in the opposition.  By that time the extremists like Limbaugh and 20% fringe that now makes so much noise in the GOP will have to give way to a different approach.  Not necessarily more moderate, but packaged better and positive rather than negative.  If they continue doing things like calling Obama a socialist, an old cold war label that appeals primarily to conservatives over 40, and attacking Sotomayor in a futile effort since her nomination is a forgone conclusion and it’ll only piss off the growing Hispanic population, they’ll sabotage themselves.    But hey, what you feel about the Democrats is similar to how many on the left felt about the Republicans in power. 

      • I hate to do this to you, Erb, but you asked for it: a point-by-point destruction of your arguments.

        “Wishful thinking on your part (how correct were you in 2008?)”

        Until September 15, McCain was leading by 5 full percentage points. It was the meltdown in the stock market that gave Obama to win. People turned to him in fear, not for hope.

        “First, the GOP has to get away from the extremists who have marginalized themselves with their silly rhetoric.”

        Of course, that’s YOUR view. However, notice since 1980 when the GOP has nominated rightist candidates – Reagan in 1980 and 1984, Bush in 1988, George W. Bush in 2000 and 2004 – the GOP has won. When we nominated moderates – Bush in 1992 (he had moderated himself right out of the White House after running as a conservative in 1988), Dole in 1996, McCain in 2008 – we have lost. The polls show clearly that Palin gave McCain a +3 point boost in 2008; without her, he would have gotten not 46% but 43%.

        “Luckily for the Republicans, they are recruiting some good moderate candidates; that’s what it’ll take to win.”

        Nope…see above.

        “They can probably kiss 2012 goodbye to Obama (like FDR, all he has to do is appear he’s doing something, and he’ll get credit – and he may end up with a Reagan like re-election year, a rebound).

        Wow…and you rail against “wishful thinking”? The Dear Leader™ is in office barely four months, and already you have him winning a second term? You must be extremely prescient. Can you tell me who will win the World Series this year? I would love to take a bet, but with your track record of betting on an election three-plus years away, you sure are frightening.

        “The GOP should gain in the House some seats in 2010, but if you look at the races they’ll probably lose ground in the Senate.”

        Need I say it again? Wishful thinking, wishful thinking, wishful thinking, wishful thinking.

        The average pickup for a party in an midterm election when the opposing party holds the White House is approximately 45 seats. The last time this happened was in 1994, when the GOP, with Clinton in the White House, picked up 54. The Democrats got 30 in 2006. Before that, we had the Democrats winning 26 seats in 1982 (Reagan), and the Democrats winning 48 in 1974 (Ford). In 1946, the year after Roosevelt died and Truman took over, the GOP picked up 55 seats; four years earlier, in 1942, in the midst of World War II, the GOP also win 55. Now, if in the middle of a war, and the year after FDR dies the GOP can win 55 seats, with Obama fugging up the country and unemployment at 10% or better, 55 may the low end.

        As for the Senate, if the Dems lose seats in the House, they will also lose seats in the Senate. Say bye-bye to Chris Dodd and perhaps Harry Reid. Arlen Specter is in deep trouble in Pennsylvania. The Republicans who werw weak have been excised. The Dems have a huge number of weak candidates at the end of their first terms who are at odds with their party or whose policies are fundamentally unpopular (against guns, or supporting the Obama Health Care Theft, etc.). As the days and months pass until next year, watch as many Dems do to Obama what they did to Clinton in 1994: abandon him. Politicians look out for themselves, no matter who is President.

        “If Obama can hold in 2012, that’ll give the Democrats six years of dominance.”

        And if the economy is still bad, and Obama has spent us into bankruptcy, he will be a one-termer. But, who knows right now? Obama’s polls have dropped to 54% approval, with 42% disapproval. That is almost near what he got in the election.

        “If the economy is truly rebounding, the best the GOP can hope for is probably a start to recovery (Presidential level – and gains Congressionally) in 2020.”

        And if the GOP wins control of the House in 2010 and Obama’s economy does not rebound, he will be a one-termer. Just ask Jimmy Carter; hell, just ask George H.W. Bush, who the year after winning the Persian Gulf War lost to Clinton.

        “If the economy truly is in a long term funk, and the US is truly losing its status as a dominant world power, the Republicans have a chance in 2016.”

        Actually, that is already happening. People will not wait until 2016 to exact retribution on the Democrats, just like they exacted retribution on the GOP for our mistakes.

        “Until then, unless lightning strikes, they’ll be in the opposition.”

        Ready for a repeat? WISHFUL THINKING…WISHFUL THINKING…WISHFUL THINKING!

        “By that time the extremists like Limbaugh and 20% fringe that now makes so much noise in the GOP will have to give way to a different approach.”

        Remember that Limbaugh was there when the GOP took control of the Congress in January 1995. And I seem to remember that the party kept control of the House in 1996, 1998, 2000, 2002, and 2004. Plus, we won two presidential elections in those years, all with the help of Limbaugh and, need I say it, George W. Bush and Dick Cheney!

        “Not necessarily more moderate, but packaged better and positive rather than negative. If they continue doing things like calling Obama a socialist, an old cold war label that appeals primarily to conservatives over 40, and attacking Sotomayor in a futile effort since her nomination is a forgone conclusion and it’ll only piss off the growing Hispanic population, they’ll sabotage themselves.”

        As for Sotomayor, polling shows that Hispanics do not support her any more than any other segment of the population does. There is no evidence – at least not yet – that opposing her as a bigoted nominee rather than as a “wise Latina woman” will hurt the GOP. In fact, it may help. In New Jersey, Corzine is losing to Christie by 13 points, in a liberal state. And Hispanics make up a large part of the New Jersey population.

        “But hey, what you feel about the Democrats is similar to how many on the left felt about the Republicans in power.”

        That’s lovely. But it still does not explain why The Dear Leader™ told us in January that if the “Let’s Bankrupt America” Spendulus Plan did not pass, unemployment would not hit 9%, and even with it today it hit 9.4%.

        Explain that, will you? And why The Dear Leader’s™ Job Approval Ratings are now at just 54%, going down, down, down rather quickly?
         

        • Nice response.  I do remember after the 2000 elections, the Republicans felt they had a permanent majority.  Well, that only lasted 6 years.  I see the Democrats now feeling the same euphoria.   The question is how long will it last.   Pelosi has more corruption charges hanging around than ever (remember “culture of corruption” and “most ethical Congress ever”?).  Obama has an economy that could really crater, particularly if he and the Democrats enact additional taxes.  But, if they don’t enact new taxes, the deficits and the interest on them will likely take the whole budget, and the country, out.  The Fed has created so much liquidity, they will have to thread the needle to sop it up before inflation runs rampant.   

          The economy is still going down, not up and not stabilizing.  This second derivative stuff is malarkey.    The second derivative is acceleration.  We can still go a long way further down without increasing acceleration.  If the economy is as poor at the statistics indicate, the market will figure it out and retreat.  Retreating markets negatively affect consumer confidence.  As interest rates rise, mortgages become more expensive, reducing the housing numbers. 

          We are a long way away from getting out of this.   And, I won’t even begin to discuss what I think of Keynesian economics.

          Rick

  • I use a very sophisticated methodological analysis to tell whether we are in or coming out of a recession.

    Three months ago I took the bus mid-morning into Manhattan. Sailed right through the Lincoln Tunnel. No traffic at all. Conclusion: Yeah, we’re in a recession. That’s the way Manhattan becomes when nothing is happening: Very easy to get into.

    Each of the last three weeks, same ride, the approach to and the tunnel itself is utterly jammed. In fact, worse this week than three weeks ago. Conclusion: We’re coming out of the recession.

    My control year for this was ’91, around Christmas, when traffic had also dried up in the City. Then came roaring back with the recovery.

    Very sophisticated.

    • “Each of the last three weeks, same ride, the approach to and the tunnel itself is utterly jammed. In fact, worse this week than three weeks ago. Conclusion: We’re coming out of the recession.”

      I have a different measure. I travel a lot. For the part year-plus, the airports have been empty. Vegas is empty. A friend of mine just went to Vegas for the first time in years; she said to me on the phone, “What happened to Vegas? The pools were empty; the hotels were dead, and the buffets were ghost towns.” So, I travel. Since early 2008, I have seen the airports – and the planes – empty. I just was out of town two weeks ago, and things are still empty. Los Angeles is dead as a doornail; you could play soccer in the terminal at LAX and not hit anybody.

      We are not coming out of the recession. Perhaps the death spiral has slowed, but when you go into stores and people are shopping only for the necessities – clothes, food, etc. – and nothing else, that means that in a consumer-driven economy there is a hesitancy of spending by the people, who are afraid for their jobs and their homes. Companies are not hiring, afraid of what might happen next. A friend of mine who runs a large company in New York says he has cut 40% of his workforce, and does not foresee any hiring until at least 1Q 2010, if not beyond, as the credit freeze has not let up, loans are impossible to get, and companies are scared sh!tless than Obama will soon tax them to death for his Health Care Theft Program.

      No, the recession is not ending. The most realist economists, like Thomas Sowell, and the head of the Dallas Fed says that we are looking at 2011 before the hints of recovery are even visible, if even then.

    • I will add two other things.  The household employment survey showed a loss of 437,000 jobs.  One explanation is the birth/death model to calculate lost jobs vs new jobs runs about 6 months behind.  So, the birth death model is reflecting experience just about as the the first stimulus was taking place.    It is probably incorrect for conditions today.

      Second, consumer credit has contracted by 7%.  It is hard to see how the economy will be taking off if the consumers are paying down debt and not sending.

      Rick

  • I have not seen business come back yet. I have seen friends in even hight tech construction tools business working on 4 days a week despite the stimulus being heavy in construction.

    I think the media is doing a superb job of talking up the economy, and hey, while its for Obama’s benefit, it does provide some animal spirits so I take it as a positibe externality.

    If Bush were still in power or McCain, I bet we’d still be hearing DOOM, DOOM, DOOM!

    I am reminded of a CPA aquaintance in SF, who in 2004-2005 said we were then in a horrible recession because of Bush…LOL, I was speechless.

    • I don’t know whether the recession is over – too many variables to say. The unemployment figures plus some other observational points (such as the empty airports James has seen; I’ve seen them too) point to a large potential for more decline before bottoming.

      Let’s suppose that does happen, after a few months of happy talk. In that case, the Democrats in 2010 are in real trouble. 1994-type trouble. Obama’s strong approval vs. strong disapproval have now balanced, where the strong approval had a 30 point edge in January. Imagine what would happen if there’s another significant dip, one he can’t blame on Bush, and after his de facto allies in the media have pumped out “good news” for a while.

      Obama could make things even worse. He owns immigration reform now, and his Democrats will bear the electoral consequences of an amnesty plan if he manages to get one through.

      Continuing Democratic arrogance and corruption factor in, too. We’re too far in advance to see what the precise mix of problems will be at election time, but the downside potential for the Democrats is much greater than the upside potential.

      Of course, their hole card is a compliant media that will spin whatever happens in the best possible light for them, especially as the election approaches. But after 2008, I’m not sure how often the media can go to that well. They are now enduring historically high levels of distrust, as well as severe financial problems.

      • You are assuming that the Republicans can provide a credible alternative. In 1994 this was provided by Newt Gingrich and his Contract With America. I don’t see anything similar now.

        • Obama was elected mostly because he wasn’t GWB.  They voted for a guy that told them nuthin’ about how he’d accomplish the “change” he was promising. These same non-thinkers might very well vote for Triumph the insult dog if he promises them he’ll pay their mortgages and fill their gas tanks.  And there’s the problem in a nutshell…
          Who, other than intelligent Conservatives, is  gonna vote for the guy that tells the truth about how to save the country?

  • No Surprise that GM had to sink like the Titanic.. Just the pain and hard work of 300 Million Taxpayers going down the drain.. Whose responsible for that?