Is This the End of the Recovery?
Has the U.S. economy turned a corner? Yes, and then another corner and now it’s going backward. A slew of bad economic data today. A taste of what economists are saying:
– It’s all unraveling this morning. OK in the US jobless claims fell and the consumer comfort index improved. But the downward revision to GDP and the chillingly large drop in Durable goods orders is enough to send chills up your spine. Yes, aircraft and defense orders were the bulk of the weakenss. But nothing there is reassuring. Have the NFL’s replacement officials been collecting economic data? Please tell me it is so. – Economist Robert Brusca
– Durable goods headline looks like an F, details look like a D. … The latest durable goods data point to some downside risk to our GDP forecast for the third quarter, though we are leaving our GDP forecast at 1.5%. – JPMogan
– … there is growing risk that a 2013 tax shock could push the economy into recession (and there is little the Fed can do to offset the fiscal shock). – RDQ Economics
– Today’s U.S. reports included a disastrous August durable goods … the ex-air equipment orders data are now tracking a recession trajectory, which may reflect fiscal cliff uncertainty that will eventually be reversed, but which send a notable red-flag for U.S. growth. … We lowered our 1.5% GDP growth forecasts for both Q3 and Q4 to 1.4% … – Action Economics.
– A trend weakening in core business investment outlays deserves the most attention. – Citi
Then we have this recession forecast from Strategas Research: "We had previously expected the 2013 recession to start mid-year, but with the fiscal cliff impact apparently showing up in capital spending, we are moving up the timeline to early 2013."
If the above forecast is correct, the National Bureau of Economic Research might wind up declaring that the U.S. economy slipped back into recession in late 2012 even though the economy was actually not yet contracting at that point. (Here is my post from earlier on why we are in the recession red zone.)
And if that happens, economic historians might well shove aside the weak three-year recovery and call the entire 2007-2013 period, the Long Recession or some such. I have already have been, just like the 1980-82 period was a long recession, two downturns sandwiching a brief recovery.
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Comments:
Jan '12
Re: Is This the End of the Recovery?
Is there no end to the wickedness of GW Bush?
Apr '11
Re: Is This the End of the Recovery?
But what is important for the election is consumer comfort and the jobless claims. So for the goal of getting Obama out of office, this morning's news set us back.
Jul '10
Re: Is This the End of the Recovery?
I'm sure this would be reported by the media if Romney's "gaffes" weren't so much more important.
Mar '11
Re: Is This the End of the Recovery?
Did I miss something? When did the recovery start?
Apr '12
Re: Is This the End of the Recovery?
Quick call Mark Zandi so he can advocate wasting more of my children's money!
Jun '11
Re: Is This the End of the Recovery?
Maybe the press will report it as the "Romney Recession" when he's inaugurated in January!
Jul '12
Re: Is This the End of the Recovery?
End the recovery?!?! As Cruiser queried in Stripes, "There was one?"
Edited on September 27, 2012 at 9:36pmMay '10
Re: Is This the End of the Recovery?
Frankly, I could live with that. Add Obamacare beginning in earnest after January, and, if The One is re-elected, I'm heading to the mountains as if it were a nuclear holocaust.
Jul '10
Re: Is This the End of the Recovery?
Lovely.
Jun '12
Re: Is This the End of the Recovery?
I concur.
In order for something to "end" it must first "begin."
May '10
Re: Is This the End of the Recovery?
I think there is a better than fair chance that the Long Recession could be looked back on as Polly Anna - ish optimism. Declining USA and developed world GDP + Unprecedented debt/money printing/ currency debasement + a sky full of black swans could = the Greater Depression.
Interesting times.