Are we or Are we not in a recession?

The technical Defintion of a recession is 2 consecutive quaters of Negative growth, or shriking.

So what are the numbers? well in the last 3 quaters they are:

Ending Dec 07 - Neg .02%
Ending Mar 08 - Pos .09%
Ending June 08 - Pos 1.9%

1.9% is actually less than expected but the pattern is over the last 3 months, an upward one.

While clearly things are not wonderful, I would have to say we are by no means in a recession. Despite what Both Obama and McCain are saying.

In fact I would say that in the face of the Housing Crisis, the Energy Crisis, and the Credit crunch. 1.9% growth is actually pretty amazing.

I would also point out that in the month of June the Dollar actually gained on many other currencies for the first time in a long while.

I am by no means trying to say that we are doing honky dory, only that things are clearly not as bad as some would have you think.

If we could only get deficit spending in check, and address the Energy crisis, we could start to see some real growth of the economy, and start our way out of this shaky economy.

 

I don't know bout that. As they say;

If it looks like a duck
Quacks like a duck
It's a DUCK!

​

 

Could be, but then is not the 3 quaters of upward direction and a month a the dollar making gains, part of what it looks like?

 

What are you using to define our "growth" in those quarters though? GDP?

You need to adjust the GDP for our debt, and come up with our NET growth. I don't know the numbers for those quarters, but I bet you'd be hard pressed to find a whole lot of NET growth in the face of all this recent debt we've taken on.

How could there possibly be REAL growth when there are major banks collapsing, gasoline at record prices, food prices skyrocketing, and people all over the place cutting back on just about EVERYTHING?

I have to run but later on I'll crunch some numbers if I have time, and see what I come up with. Maybe you do the same, and we'll compare.

 

Charles .... I am not a big fan of "numbers" or " % " ... what I see is when I go to the grocery store, pay my utilites, etc. But .....

..... one thing is lookin up! I actually paid $4.13 a gallon for gas today!!! Wheeeeeeee!!!

 

Stange! In the background my television is on a news channel! They just now said that the "things are lookin up" smoke screen is because of the Stimulus Checks! Could be, ya know

 

A recession is when real GDP growth is negative for two or more consecutive quarters. So, technically we are not in a recession. We are by no menas in great times, I will admit. Just don't call it a recession, because it is not.

 

Well I filled up this morning for $3.52, down from $4.01 four weeks ago. That's a hell of a drop. Probably what bouyed consumer confidence a bit more than expected.

While the credit and housing crisis still have a lot of excess to get rid of yet (housing in California is STILL 15-25% to high, even higher in some areas like Silicon Valley) and lots of write downs still to come. Dollar is still very weak.

But the reach of that is not as far and deep as some maintain. And we really do not want gas to come down too far, too fast, and start giving people second thoughts about their energy behavioral changes they have made. But the reality the only ones really getting hurt are the ones out at the margins of society and no one else....

 

These numbers are not legitimate. GDP is the measure of real growth, which means inflation in domestic production must be removed from the measure. This is done by applying what is called a GDP deflator (a measure of inflation of domestically produced goods). Go take a look at the GDP deflator used in recent quarters and tell me if you think that is an accurate measure of the domestically produced goods inflation we are experiencing.

I should also note that the December number was once positive and just had a non-trivial adjustment to the downside (about 0.8%).

What was the GDP deflator used for Q2? 1.06%. Yeah right.

Brian

 

well, the strength of an economy is typically judged off of the housing and auto markets. not sure about the auto, but housing is doing quite poorly. i would say this is a unique economic time, and therefore hard to label it.

i hear that the dollar is artifically low right now compared to the euro, so it is likely to rise. (this was using the bigmac index)