In February, I noted with some amusement that unnamed economists were saying that we were already in a recession. To say that in February, the economists had to be prescient, had to able to see the future, because we had slow growth in the fourth quarter of last year, and the first quarter of this year was not over. Today, the preliminary growth figures came out for the first quarter, showing slow growth, .6 percent, but no recession. The numbers might be revised downward later, but for now we can not say that the economy is in a recession. Unless, of course, we are prescient.
This news makes me a little more optimistic about the economy, a little more inclined to think that we may avoid a recession entirely this year. And that would be quite an achievement, considering how long this expansion has lasted already.
Cross posted at Jim Miller on Politics.
(In that February post, I said that the most common definition of a recession is two quarters of declines in the GDP. That's probably true, and it is certainly true that almost all recessions have at least two such quarters, but that isn't the semi-official definition used by the NBER.)
More: I am not the only one who now thinks that the odds are against a recession this year. So do the bettors at InTrade. And if you disagree with us, you can, as I write, get odds of almost 2-1 for your bet.
Posted by Jim Miller at April 30, 2008 01:09 PM | Email ThisThe Media chose to report what they will, and unfortuneately that is not always reality, and more likely emotion
I listen to the news almost every morning and according to them it's the end times; however, when I look at the economic reports and other indicators growth is just slower
Posted by: Green on April 30, 2008 02:22 PMBut wait a second. Aren't more affordable housing and higher gas prices a liberals dream come true? How often over the years have we heard leftists rail about unaffordable home prices? How many times have we heard them say we ought to pay "as much for gas as they do in Europe".
Nothing seems to make these people happy.
Well, no. Everyone does NOT agree. A recession is two consecutive quarters of NEGATIVE growth. We have not had that yet. We have seen slower rates of growth. But not a reversal, which is what we'd have to see to have a recession. But maybe Obama will read this and educate himself on the definition of a recession.
Posted by: Michele on April 30, 2008 03:59 PMRemember, if a dem politician says everyone believes it then all the lemmings on the far left agree automatically.
Posted by: Dengle on April 30, 2008 04:15 PMI'd argue that inflation (especially when you count things like food an energy - which the .gov does not) is much higher.
If *real* inflation numbers were being used, GDP would have been negative.
Posted by: Nolaguy on April 30, 2008 04:26 PMIt's good to know that Jim has put that problem behind us by declaring that we are certainly NOT in a recession.
Posted by: Unkl Witz on April 30, 2008 04:46 PMJust what you wanted though isn't it Witz? Your liberal media lapdogs have been beating the recession drum for months. How come your Democratic Congress hasn't come up with some magic solution?
Posted by: Bill Cruchon on April 30, 2008 04:53 PMMaybe we should get back to talking about issues like the wars and the economy and what Hagee/Wright said or that McCain called his wife the c-word in public.
Also Bill, I don't know if you've ever taken Economics 101, but consumer confidence is a huge factor in the national economy. If over 80% of the people out there think we're in a recession now, we are probably going to be in one very soon, regardless of our .6% growth in GDP.
Lets talk about the left's stunning record of success, such as how you can't manage public education no matter how much public money you receive year after year.
Let's discuss how the foolish "War on Poverty" has destroyed the black family, killed thousands of young African Americans and resulted in so many hopeless, angry, dependent people.
Darned right we should talk about issues, without the leftist spin and the constant blaming others for your failures.
Posted by: Bill Cruchon on April 30, 2008 05:15 PMCome on, the savvy Intrader knows that the contract rules stipulate that "[e]xpiry will be based soley on the data reported by the U.S. Department of Commerce (Bureauof Economic Analysis, Table 1.1.1, "Percent Change From Preceding Period in Real Gross Domestic Product") as reported by the BEA."
You don't have to believe that the economy will be great to believe the BEA may not be fudging the numbers for perceived political advantage. The credibility of our government watchdog agencies is negative at this point.
Posted by: captive agency on April 30, 2008 05:20 PM#15 makes a good point about inflation numbers as a likely source of tweakage. 3.5% seems wildly optimistic.
Posted by: captive agency on April 30, 2008 05:26 PMI guess I'd do that too if I was him.
Posted by: Bill Cruchon on April 30, 2008 05:27 PMAnd please show me the formula that YOU learned in Econ 101 where consumer confidence is factored into the equation.
Posted by: Keynes Don't Play That on April 30, 2008 05:34 PMAs for the War on Poverty thing; not so much. That's a pretty complicated issue Bill, especially if you've didn't get around to basic economics in college.
By the way Bill, can you find Iraq on the globe? How about the Pacific Ocean? If so, you must have gone to a private school.
You know, the GDP grew - on average - by 3% from Jan 2003 to November 2006. Since November 2006 it's crashed pretty big...
Hmmm, what corresponds with a November 2006 date? Perhaps the Democrat takeover of Congress? Seems to me that the GDP started falling after Pelosi, Reid, et al took over.
But what do I know, I just look at factual data rather than take a poll of how people "feel".
I know, that makes me an uncaring capitalist. Oh the humanity!
Posted by: Shanghai Dan on April 30, 2008 06:00 PMNo, it just puts you in the same category as those people who read their horoscope because they somehow think it actually affects the outcome of their decisions that day.
What's missing from your analysis is causality. What is the link between the election of a Democratic Congress and the decline in Gross Domestic Product??
Recall it was Billy boy who wanted to know why Congress hadn't fixed the problems by now? Not me.
At least you get props for recycling, unk. It would save us all if we'd just use the same threads every few years. Just replace the R's with D's and vice-versa. Especially when it comes to civil liberties (see Reno and Ashcroft).
Posted by: russell garrard on April 30, 2008 07:03 PMNow go back and read my posts and let me know where I said either party, or either branch of government, had that much control over the economy. Or blamed either party for the recession?
I for one am shocked, SHOCKED, that a lot of people polled would think that we're in a recession when NBC and the New York Times take every chance they can to insinuate it, or to flat out state it as fact. NBC this morning even had a graphic with what was supposed to look like a formula of some factor + some other factor + some other factor = "RECESSION?" Of course, they closed it with the same note as the NYT - "well, so we're not TECHNICALLY in a recession, but it's still very very very bad." Credit where credit is due, they did stop short of super-imposing Bush's face over it, or having an animated Obama come in and crush the word RECESSION in his mighty hands.
Maybe some of the doom-n-gloomers could borrow some of Mr. Obama's patented Hope.
Posted by: RookieRick on April 30, 2008 08:23 PMThe politicians need to grow a pair after they get some testosterone and start building nuclear power plants yesterday, drill in ANWR and build more refineries and get rid of coal plants that are polluting the air and causing more global climate change. That would lower gas prices down to $2,50 - $3.20/gallon or less - in several years at a minimum. Green energy is OK also. Otherwise, the OPEC'rs have us by the 'nads and the prices will be $0/gallon in a few years. That would be a shot in the arm for the economy in itself. I am waiting for Sen. McCain to start talking about this now - he needs to get off the status-quo bandwagon - that is so yesterday and Stupid !
Posted by: KS on April 30, 2008 08:56 PMThe causality is that the party that's committed to rolling back the tax cuts gained the purse strings in 2006. The economy started shrinking because the Dems are pledging to hike tax rates back up. Businesses and investments retract before the disaster - it's called planning.
The drop in the GDP and the economy in general started 18 months ago, just at the time the Democrats took over Congress. And to date they've shown amazing ineptitude in doing their job. Down to idiots like Chuck Schumer demanding that the gas companies "pay" the Federal tax on gasoline (so the Government continues to get its chunk). Never mind the Government already gets 3X the profit from a gallon of gas than "Big Oil".
The problem is Big Government, and the Democrats want more and are pushing for more. THAT has stalled the economy.
Posted by: Shanghai Dan on May 1, 2008 07:27 AMBy the way Bill, can you find Iraq on the globe? How about the Pacific Ocean? If so, you must have gone to a private school."
How I love liberals.
Aren't liberals a bunch of head cases? They are actually hoping people lose their homes, and their jobs so they can win an election. What can we expect from the bunch that has prevented oil drilling in the US for 40 years and think using land to grow expensive "alternative fuel" instead of food is a good idea?
Unk, I think you read into my commment something that wasn't there. I didn't say you blamed either party. I just had to comment on hearing the exact argument I've used in the past coming from the other side....
This blog recently linked to a very good Seattle Times op-ed by former 8th CD Dem Cong. candidate, Alex Alben. He compared pols, especially presidents, who talk about fixing the economy to the legendary King Canute, who believed he had the power to hold back the sea.
Why don't we ever hear that angle talked about in the press? Really sometimes, we are no better off than long-ago folk who blamed witches for everything from storms to accidental horse tramplings.
Posted by: russell garrard on May 1, 2008 09:32 AMWow, Unkl Witz unknowingly described the average groupthink Seattlite with a subscription to or average reader of the Seattle P-I (Pravda-Intelligentsia).
Weird huh?
Posted by: Rick D. on May 1, 2008 11:37 AMwhat kind of Liberals ? Liberal elites would work, because the ruling class of the left are liberal elites. Get into the 21st century - they are progressives or leftists. The classification of just Liberals reminds me of the current state of the Republican Party - feckless. Even Democrats sounds better. Some liberals (the traditional ones) make sense about certain issues. Progressives and leftists are the classifications that should be ridiculed. They are wrongheaded and rarely make sense and are really liberal rebels.
Posted by: KS on May 1, 2008 07:00 PM