skews13
Diamond Member
- Mar 18, 2017
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The brutal GDP report released on July 28, showing the economy had contracted for a second quarter in a row, led some to insist the much-feared recession had already arrived.
And in some ways that makes sense: Since 1948, every period of back-to-back quarters of negative growth coincided with a recession.
But the recession-is-already-here argument has been severely undermined since that GDP report came out. A series of events in the past 10 days suggest those recession calls are, at a minimum, premature.
Yes, the economy is cooling off after last year’s gangbusters growth. But no, it does not appear to be suffering the kind of downfall that would qualify as a recession.
Consider the following developments:
“This is not a recession. It’s not even in the same universe as a recession,” Zandi told CNN. “It’s just patently wrong to say it is.”
Zandi said the only thing signaling an ongoing recession is those back-to-back quarters of negative GDP. Yet he predicted those GDP declines will eventually get revised away. And there are early indicators that GDP will turn positive this quarter.
Sorry America haters. More good news for the country.
And in some ways that makes sense: Since 1948, every period of back-to-back quarters of negative growth coincided with a recession.
But the recession-is-already-here argument has been severely undermined since that GDP report came out. A series of events in the past 10 days suggest those recession calls are, at a minimum, premature.
Yes, the economy is cooling off after last year’s gangbusters growth. But no, it does not appear to be suffering the kind of downfall that would qualify as a recession.
Consider the following developments:
- The economy added more than half a million jobs in July alone.
- The unemployment rate dropped to 3.5%, tied for the lowest level since 1969.
- Inflation chilled out (relatively speaking) in July for both the consumers and producers.
- Gas prices tumbled below $4 a gallon for the first time since March.
- Consumer sentiment has bounced off record lows.
- The stock market notched its longest weekly winning streak since November.
“This is not a recession. It’s not even in the same universe as a recession,” Zandi told CNN. “It’s just patently wrong to say it is.”
Zandi said the only thing signaling an ongoing recession is those back-to-back quarters of negative GDP. Yet he predicted those GDP declines will eventually get revised away. And there are early indicators that GDP will turn positive this quarter.
Sorry America haters. More good news for the country.
