April 30, 2008
We Are Not in a Recession
The Commerce Department released preliminary data on the GDP for the first quarter of this year. It showed a growth rate of .6% [corrected]. Granted this is not stunning but is it not negative -- we are not now and have not been in a recession. We are in a slow growth period. The press and politicians have claimed we are in a recession since summer of last year -- it is false and has been false. Why the hysteria? Media likes crises to sell ads and out-of-power politicians like bad times to advocate change and get votes. Folks, we are not in a recession. This is good news--except to scare mongers.
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Except that this is, as you say, "preliminary" data. When the "final" numbers come out, it is equally likely that they will be negative, a possibility well within the range of the estimating error, and we will have been in a "recession" (if it is followed by another negative quarter of course). Time will tell.
Posted by: Jerry Maloney | Apr 30, 2008 7:12:18 AM
Jerry- You say IF the numbers are revised and are negative and IF it is followed by another negative quarter THEN we will be in a recession. You are absolutely right--IF that happens. However, IF that doesn't happen THEN we ARE NOT in a recession! Likewise, IF Clinton wins the primary and IF she wins the general election THEN she will be President. My point: we have some numbers to go by and they are not pointing to a recession. Why don't you wait until all of your "ifs" come true and then complain?
Posted by: Anti-Jerry the Scare Monger | May 1, 2008 5:35:43 AM
Your logic is irrefutable, as usual. In the interest of leaving a more accurate record, I didn't say "IF"; I said "When" they are revised, as they surely will be. I also mentioned the economic definition of a recession - two consecutive quarters of negative results - in order to point out that even "if" the revised numbers are negative, it is still not a recession, as defined, unless that second negative quarter occurs.
My only point is that, in my opinion, you do not have a solid basis (yet) for your assertion, just as I do not for a contrary conclusion.
Posted by: Jerry Maloney | May 1, 2008 10:43:39 AM
Wasn't the number reported 0.6%, not 0.06%?
Posted by: NotLawyer | May 2, 2008 7:20:42 AM