Economics Topics

Only on a day like today does an over 1 percent decrease in industrial output move to third page. But this item (and this hilarious article) reminded me to update the indicators used by the NBER BCDC are headed. Their trajectories are, in general, not too ...

This week, there were a number of new indicators that the euro area actually might already be in recession: For July, Eurostat reported another drop in industrial production and revised prior months' data downwards, leaving the July figure now 1.1 percent below the figure for Q2. Moreover, the unemployment rate ...

The European Commission has revised downwards its 2008 economic growth forecasts for the euro area from 1.7 to 1.3%. Frankfurter Allgemeine reports that the strong performance of Germany during the first quarter has limited the extent of euro area growth, as the Commission expects the German ...

The U.S. will hover near recession in the second half of the year with consumer spending posting back-to-back quarterly declines, a top economic forecaster said Wednesday.

But next year should be markedly better as the housing downturn wanes and starts contributing to growth again while consumption improves. “It’s a strange bird ...

In yesterday's FT, "All in this together" assessed the possibility of a roughly synchronized downturn in the world's major economies, with the United States, ironically enough, suffering the smallest hit. This brings up all sorts of interesting questions regarding exchange rates, if one believes that Taylor rules define monetary ...

Is there anything good to say about today's report from the Bureau of Labor Statistics that the U.S. unemployment rate jumped up to 6.1% while seasonally adjusted nonfarm payrolls declined by another 84,000 jobs? Well, here's one thing. It gives us some real clarity as to just ...

The unemployment rate rose from 5.7 to 6.1 percent in August, and non-farm payroll employment continued to trend down (-84,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In August, employment fell in manufacturing and employment services, while mining ...

Following the big increase in the unemployment rate announced today (The un-recession):

What I suspect, however, is that this is what the 21st-century business cycle looks like. The sharp slumps of the past partly reflected an inflation-prone environment, in which the Fed occasionally had to slam on the brakes; it also reflected ...

I pity the folks on the National Bureau of Economic Research (NBER) Business Cycle Dating Committee, burdened as they are with the task of determining if and when the U.S. economy finds itself in an officially designated “recession.” While skepticism about the preliminary report on second quarter ...

Since the end of last term, the UK economy has experienced a miserable summer. In the past few months, the economy has slowed down and now looks set to enter a recession. In particular the weakness of the economy is characterised by:

The OECD is looking at 1.7% growth for the euro area this year – with Germany 1.5%, France 1%, and Italy 0.1%, according to a report by Frankfurter Allgemeine, while the OECD is much more optimistic about the US economy, where ...

Though last week’s report on U.S. gross domestic product (GDP) growth in the second quarter is second-hand news by now, I’ve taken note that Barry Ritholtz’s views on the news has, in particular, continued to rumble through the blogosphere. Barry is not happy with the GDP ...

The recent GDP numbers from both sides of the border are somewhat puzzling:

Here are a couple ...

The recent GDP numbers from both sides of the border are somewhat puzzling:

Here are a couple ...

Britain is in the grip of its worst economic crisis for 60 years, Alistair Darling has admitted.The Chancellor of the Exchequer warns that the slump is going to be "more profound ...

At the moment, the expected path for Hurricane Gustav threatens the Gulf Coast. Is the Bush administration ready?:

What's wrong with this Hurricane?, by Moira Whelan: I just noticed that the daily brief customarily done in advance of a hurricane is happening …but a big shift here: the briefing is ...

Aug. 29 (Bloomberg) -- Europeans' confidence in the economic outlook fell more than economists forecast this month as the economy teetered on the brink of a recession. Inflation unexpectedly slowed.

The euro pared gains after the reports, which ...

Spending by U.S. consumers slowed in July as the impact of the tax rebates faded and a pickup in inflation eroded Americans' buying ...

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.3 percent in the second quarter of 2008, (that is, from ...

Real GDP was up 3.3% in the 2nd quarter.� That's more than most expected.� Certainly not what you'd expect to see in a recession.� It should be noted that this is not a clean bill of health for the economy.� It would be premature to say that we're out ...

The preliminary GDP release today provided a number of surprises. The first surprise was not that GDP was higher than the advance release (given the June trade figures reported earlier this month), but rather that at 3.3% it exceeded the 2.8% (SAAR) of the consensus [0]. The second ...

Reactions to today's announcement that second quarter GDP growth has been revised upward from 1.9 percent to 3.3 percent:

A booming economy?, by Andrew Leonard: The Department of Commerce has revised its figures for second quarter GDP growth rate to 3.3 percent, up from the previously reported 1.9 percent, ...

Although revised second quarter gross domestic product figures released Thursday suggest the U.S. is nowhere near a recession and may even have grown faster than its noninflationary potential, an alternate measure the Federal Reserve looks at shows significant weakness.

GDP swelled 3.3% at an annual rate in ...

According to the Federal Reserve’s August 5 meeting minutes released Tuesday “many FOMC participants noted that recent developments suggested that economic activity was likely to remain damped for several quarters.” Fed staff economists also cut their second-half 2008 and 2009 GDP forecasts. That gloom may be unwarranted, Tuesday’s data suggest.

There is more bad news about the German economy. Yesterday, the Ifo index registered a third consecutive sharp fall – down from 97.5 to 94.8 – the lowest level since 1993. The fall was driven by a sharp deterioration of future expectations, as the Germans have switch from euphoria ...

"Is the first zone wide recession in the short history of the eurozone about to be registered?" asks Edward Hugh. I was curious to apply the algorithm for calculating my U.S. recession indicator index to a euro area GDP measure to get an answer.

Today's data releases have shown that the state of the German economy is worse than even the pessimists have thought so far. Details from Q2 GDP data revealed that there were fundamental rather than merely technical factors behind the siginificant drop of GDP in the second quarter (0.5 percent quarter-on-quarter ...

>

"Las Vegas Sands Says U.S. in a 'Psychological Recession'."

Imagine that: Executives who make their living on Americans' reliably reckless financial decisions are saying that people are too bummed out to gamble.

-Michael Santoli

>

Had that been all, then ...

Many people may not care whether our current situation meets the formal definition of a recession, but as I've explained previously, you should. Here's a summary of how I see the economy at the moment. I begin by discussing a new paper by UCLA Professor

Any number of analysts - including me - have noted that 20% of Canadian output is  exported to the US. So it's natural to conclude that a reduction in economic activity in the US will reduce the demand for Canadian goods, and that this would in turn induce ...

Monthly US data on payroll employment, civilian employment, industrial production and the unemployment rate are used to define a recession-dating algorithm that nearly perfectly reproduces the NBER official peak and trough dates. The only substantial point of disagreement ...

Is it weird to link to Dean Baker three times over the course of three successive blog entries? Not when he comes out with stuff like this:

It is very likely that the third quarter GDP number will be negative. That may not mean very much in ...

One item largely overlooked in the reporting on the surprisingly large jump in the July CPI is its implications for growth. The 0.8 percent jump in the CPI will almost certainly exceed the increase in nominal consumption spending for the month (nominal retail sales fell in July), which means that ...

The eurozone moved closer to recession on Thursday after it emerged that the economy contracted in the second quarter for the first time since the launch of the euro.

The economy shrank by 0.2 per cent in ...

I'll state again what everyone familiar with the Mises-Hayek business cycle knows: the downtown is a response to an artificially inflated economic structure. Loose credit, courtesy of the Federal Reserve, has been sucked into certain sectors and industries in a way that cannot be sustained. The ...

The Washington Post reported today on the economic slowdown hitting Europe. The article makes the interesting point that, while the Federal Reserve Board lowered interest rates when the economy started to run into trouble, the European Central Bank has responded by raising interest rates.

The article includes comparisons of growth ...

Merrill Lynch’s David Rosenberg, the first economist from a major bank to declare a US recession was underway back in early January, argues that recent unemployment figures show yet more evidence that the ...

With the current economic mess now over a year old, no one wants to believe there’s still more pain ahead.

Indeed, in their year-ahead predictions back in December and January, most economists expected U.S. growth would be weak in the first part of 2008 and then rebound (some even expected ...

Fifty-five thousand jobs were ...

How many more DeLong Units will we have to wait until we know whether the global economy will fall "right itself or begin a downward spiral"?:

The Knife’s-Edge Economy, by J. Bradford DeLong, Project Syndicate: Since 2003, I have been saying that the global economy is badly unbalanced ...

Don Fishback and Barry Ritholtz are shocked -- shocked! -- that the InTrade recession contract is based on hard GDP numbers rather than, um, something else, maybe an NBER pronouncement the timing of which is entirely unknown.

The fact is that prediction markets have to be based on something ...

An update on the state of the economy, and a call for aggressive fiscal stimulus "to sustain employment while the markets work off the aftereffects of the housing bubble":

A Slow-Mo Meltdown, by Paul Krugman, Commentary, NY Times: A year ago, as the outlines of the current financial crisis were ...

The 1.9% SAAR growth rate in 2008Q2 [BEA] is widely viewed as a positive [0]; and the fact that GDP growth remained, in this advance release, above zero is a positive. However, when taken with the annual revision, one sees some interesting aspects. Not only was growth in ...

In both the US and Canada, employment and GDP numbers are going in different directions. Employment rates are at all-time highs in Canada, and they've been falling (from a not-particularly high starting point) in the US. OTOH, US GDP numbers have been outperforming those in Canada.

Why?

I suppose one place to ...

The May GDP numbers are out, and we're still below the level observed in November of last year. But can we call it a recession? If we do, we'd have to call it a 21st-century recession: it looks a lot like what we saw in 2001-2, but not ...

While the latest GDP figures suggest an economy that continues to grow, today's employment data are more consistent with the claim that the U.S. economy has entered a recession.

Edward Harrison makes a good point about the unreliability of GDP numbers: the headline GDP number is equal to nominal GDP growth minus the GDP deflator -- a measure of broad inflation. When the Q4 2007 GDP growth was revised from +0.6% to -0.2%, half of that was due ...

The Bureau of Economic Analysis reported today that U.S. real GDP grew at a 1.9% annual rate in the second quarter of 2008, less than many analysts had been predicting a week ago, but substantially better than the 6-month-ahead predictions for that number that we were hearing back in ...

The U.S. economy grew at a healthy pace in the second quarter, the government said today, despite being buffeted by a financial crisis, a deep ...

A quick note on this morning's Gross Domestic Product data showing growth of 1.9% in the second quarter. As BEA points out, the higher growth rate compared to first quarter is due in part to increased exports and decreased imports. But ...

Not long ago, we asked if it were possible to have an economic recession without ever having the GDP growth rate drop into negative territory.

Thanks to today's revisions in previously reported quarterly GDP growth rates, we can now say we've had at least one quarter ...

The big-picture economic news looks good, on the surface. But don't be fooled. It's not as robust as it looks.

Today's release of the "advance" number for second-quarter GDP shows that the economy rose by a real annualized 1.9% pace in the three months through June. That's up sharply from ...

Why has unemployment remained relatively low even though the economy is sputtering?:

A Hidden Toll on Employment: Cut to Part Time, by Peter S. Goodman, NY Times: ...On the surface, the job market is weak but hardly desperate. Layoffs remain less frequent than in many economic downturns, and the unemployment ...

Kenneth Rogoff says we need to raise interest rates to prevent inflation, to quit trying to stimulate the economy with fiscal policy, and allow financial institutions to fail:

The world cannot grow its way out of this slowdown, by Kenneth Rogoff, Financial Times: As the global economic crisis hits its ...

The 2001 recession ran eight months. So did the 1990-91 contraction. The current economic slowdown, if it ends up being declared a recession, could challenge both of those to be longest since the 16-month recession in 1981-82.

The nation’s semi-official recession arbiter, a group of economists at the nonprofit National ...

New Zealand yesterday cut its benchmark interest rate for the first time in five years and said further reductions ...

First Trust's Brian Wesbury is predicting a remarkably positive GDP for the second quarter of 2008 (HT: Mark Perry):

Late next week the government will release initial estimates of real economic activity in the second quarter. Not long ago, in early April, when the quarter ...

European Central Bank officials are increasingly suggesting it may take longer than expected for the euro-zone to limp out of a weak second quarter.

“It could be that recovery takes more time,” said ECB executive board member Lorenzo Bini Smaghi in Italy’s La Stampa newspaper, when asked about ...

Some lawmakers believe the economy is in recession, and many Americans believe it, too. Federal Reserve Chairman Ben Bernanke, once responsible for calling recessions, doesn’t think it matters much.

At a House hearing, Mr. Bernanke ...

PROPERTY values in Melbourne and every state have slumped, with more than 50 per cent ...

"You've heard of mental depression; this is a mental recession," he said, ...

3rd part of our series on the EU after the Irish No to the Lisbon Treaty��

The economic outlook for the euro area is deteriorating fast: This week has brought a number of new indicators pointing at a sharp slow-down ahead. Not only are ...

Unfortunately, this seems to be unfolding according to script.

Falling sales and income taxes, combined with rising energy costs, continue to erode state finances according to a report released today by the Nelson A. Rockefeller Institute of Government, the public-policy research arm of the State University of New York. Most states are required by law to balance their ...

Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times.

In March of this year, Ed Leamer predicted that the US would narrowly avoid a recession [link via Newmark's Door, still my first read each day]. This forecast clearly reflects updated information, given his discussion over two years earlier, in which he expressed dismay about the US ...

When we last looked at the present odds of the U.S. being in recession, we found that the likelihood of a recession was beginning to wane. Two weeks later, the odds as determined one year ago using a method developed by Jonathan Wright that the U.S. would ...

More likely than not, the U.S. will experience a recession. The housing recession and credit crisis are ...

"[UCLA] Economists predict more pain ahead but no recession".

Over the past month, I and others have said that if one looks at available information on monthly GDP, which is only available from estimates of MacroAdvisers, that output declined within the first quarter of the year, even though as standardly reported GDP was higher in QI overall than it ...

Nouriel Roubini, professor of economics at New York University's Stern School of Business, talks about May retail sales, Federal Reserve policy and the outlook for the U.S. economy. Retail sales in the U.S. rose twice as much as forecast in May, with purchases climbing 1 percent, the most in six months, the ...

Nonresidential investment has been increasing until 2008Q1, at which time it essentially stalled (-0.2 ppts. annualized in log terms). On the basis of past historical correlations, what's in store?

Lakshman Achuthan, a managing director at Economic Cycle Research Institute, talks with Bloomberg's Carol Massar in New York about the outlook for the U.S. economy, inflation and consumer prices. The consumer price index increased 0.6 percent in May, the Labor Department said today. So-called core prices, which exclude ...

Ask a group of Wall Street Economists of we are in a Recession, and you get some interesting results: 52% say yes, down from� 76% in April.

The chart on the right is the most recent survey answers (May), while April is to the right.

This past weekend, we received an e-mail pointing to this video of the Financial Times' John Authers, who points to Intrade's recession market, stock prices and manufacturing exports as signs that the risk of recession taking place in the United States this year is fading. ...

Statistics Canada's March GDP release was the fourth consecutive month in which output failed to go above what it had been in November 2007. So are we going into a recession as in 1981-82 or 1990-91? Or will the Canadian economy bounce back with stronger growth as in 2001-2002?

Before answering, ...

This argues that "A recession looks likely," and that policy won't be able to prevent it from happening:

Will the credit crunch lead to recession?, by Nicholas Bloom, Vox EU: One of the most striking effects of the recent credit crunch is a huge surge in ...

Economists and others react to better-than-expected data on May manufacturing activity from the Institute for Supply Management (ISM), and the Commerce Deptartment’s April construction spending report.

It is too early to sound the all clear, particularly with housing still in freefall and consumer confidence at rock bottom, but it increasingly ...

There's been relief in many circles that GDP in 2008Q1 was revised upward. I too take this as good news, to the extent that the economy seems to be growing more rapidly -- and output more balanced -- than previously thought. Figure 1 depicts the q/q SAAR growth rate, ...

Is the United States slipping into recession? Perhaps the following chart will provide some insight:

Being naturally optimistic, we believe that the ...

For those of you who don't live 24/7 in the blogsphere, you may have missed the latest flare up in reputation management -- Rachael Ray's scarf. Here is a summary of the controversy from the NewYork ...

Real disposable personal income decreased less than 0.1 percent in April, in contrast to an increase of less than 0.1 percent in March. Real PCE decreased less than 0.1 percent, in contrast to an increase of 0.1 percent.

Economists and others weigh in on the 0.2% rise in consumer spending and accompanying data on inflation and personal income.

The Commerce Department this morning revised upward its estimate of first quarter growth in real GDP to 0.9% (precisely in line with the expectations of economic forecasters). 

As a member of the NBER’s Business Cycle Dating Committee, I am asked frequently ...

Federal Reserve Bank of Dallas President Richard Fisher said he sees the U.S. economy slowing down in the near term, but not heading into a recession.

“I think we’ll have a long period of anemic ...

Die Rezession werde "tiefer gehen und länger dauern, als viele denken".

"Sie brauten ein Giftgetränk und mussten es am Ende selbst ...

This piqued my interest (via Mike Simonson):

Ignorance about recessions has taken hold because of a simplistic idea that a recession is two successive quarterly declines in gross domestic product (GDP), a measure of the nation's output.
The idea originated in a 1974 ...

One of the latest ideas floating around is that you cannot possibly have a recession until there is 400k new jobless claims per week. "Below 400k New Claims = No Recession." (New Jobless Claims are released today at 8:30 am. Consensus is for 370K, with a range of 360K ...

Interesting piece in Business Week on the independent National Bureau of Economic Research (NBER). They are the official arbiters of economic downturns, the ones who actually date the beginning and end of recessions.

What it takes to call an actual recession:

"Many people think the definition of a recession ...

From Macroeconomic Advisers, May 14:

Monthly GDP Index: March 2008

Monthly GDP rose 0.3% in March. This followed a 1.0% decline in February that was revised up from a 1.2% decline in last month’s report. The moderate increase in monthly GDP in March can largely be accounted for by ...

"[A] recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
National Bureau of Economic Research (NBER)

From WSJ, Henry Pulizzi and John D. McKinnon write:

Jeremy Piger's recession probability index is creeping upward. This is for data through February, the latest data available due to reporting lags:

Also: See Jim Hamilton.

GM, hobbled by a strike at a major axle supplier, posted a 16% sales drop while Ford sales slid 12%. Chrysler reported a 23% decline. Japan's Toyota Motor Corp. ... managed to snap a fourth-month streak of weaker ...

The 0.6 ppt growth rate (SAAR) reported in the 2008Q1 advance release seemed to validate the President's assertion that we're not in a recession, discussed in this post.

James Hamilton updates his recession indicator index following the advance Q1 GDP release:

Recent sluggish growth rates bring our recession indicator index for the fourth quarter of 2007 up to 26.9%. That’s its highest value since the 2001 recession, but still well short of the 65% reading ...

There's been a lot of good stuff written on the GDP report, much of it on the slightly boring question of whether it means we're in a recession. To me, the answer's pretty simple: you have to be clear about what you're forecasting, and anybody who predicted that we ...

My first thought upon reading that, the U.S. economy grew at 0.6 percent for the first quarter was Woohoo! We’re not technically in a recession.

Matt Yglesias had a similar thought and uses ...

The U.S. economy grew -- but just barely -- over the first three months of the year, confirming impressions of ...

The BEA announced today that growth in the first quarter is estimated to be .6%, though that figure could be (and probably will be) revised later.

There is a lot of discussion about whether this means we can say the economy is in a recession or not (Hamilton, Ritholtz,

The good economic news in the Q4 GDP report was that non-residential investment was still positive. Investment in non-residential structures increased at a very robust 15.8% annualized real rate. And investment in equipment and software increased ...

When we originally developed our two-quarter GDP bullet thermometer chart as a visual tool that we could use to better describe the overall health of the U.S. economy, we did so to address a deficiency that Bill Polley observed in the traditional definition of a recession ...

The Bureau of Economic Analysis reported today that U.S. real GDP grew at a 0.6% annual rate in the first quarter of 2008, the same tepid growth rate we saw in the fourth quarter of last year.

Economists and others weigh in on the 0.6% growth in first-quarter gross domestic product.

Well, the debate will begin as to whether the US economy is in a recession, a slowdown or what. This morning, BEA said its advanced estimate of the 1Q GDP growth was 0.6% (at an annual rate). GDP grew by only ...

US Q1 GDP is given a 69% chance of being positive, according to last trade prices on prediction market Intrade (contract expiry is based on the final GDP release, not today’s advance release).� Intrade pricing suggests a better than even chance that US GDP growth will be positive ...

Warren Buffett, the world's richest person, said Monday that the U.S. economy is in a recession that will be more severe than most people expect. "This is not a field of specialty for me, but my general feeling is ...

The speaker at our UCSD Economics Roundtable this week was Peter Hooper, chief economist for Deutsche Bank Securities. Here is a brief summary of his thoughts about the U.S. economic outlook.

The U.S. economy is already in recession -- and may echo the 1930s, Nobel Laureate Joseph Stiglitz said Friday.
...
"This is going to be one of the worst economic downturns since the Great Depression," said Stiglitz.

The Ifo was down 2.2 points to 102.4, the lowest level since early 2006. Insee indicator’s was also down by a similar degree – from 108 to 106. The German government is cutting its 2009 growth forecast to 1.2% (1.7% this year). The Belgium indicator – seen by many ...

One story you can tell about recessions is that the presence of wage and price stickiness throws relative prices off their optimal paths, and this sends false signals to markets and causing resource misallocations -- some sectors have too many resources flow into them, others not enough. At some point, ...

We know by now that the old rule of thumb for recession – two consecutive quarters of negative growth in gross domestic product (GDP) – is out the window. Still, at least there were two quarters of contracting GDP during the last recession in 2001. This time around, we just ...

From Reuters:

"We're not in a recession, we're in a slowdown," Bush said at a news conference at the end of a two-day summit with Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon.

California's unemployment rate rose by a whopping half a percentage point in March, reaching 6.2% as a weakening economy shed jobs in the ailing construction and financial activities sectors. In all, 1.13 million were unemployed.
...
California ...

Brisbane's property market ...

Former Federal Reserve Chairman Alan Greenspan said the U.S. is “in the throes of a recession” and continued to publicly defend his legacy Tuesday in an interview with business-cable network CNBC.

Greenspan said that he has “no regrets” over Fed policy conducted during his tenure and that there was little the ...

Many Federal Reserve officials appear to be bracing for a recession. Minutes of their March 18 policy meeting, released today, said some officials believed that a “prolonged and severe economic downturn could not be ruled out” due to credit constraints and weakening housing markets. The Federal ...

During the ...

"I think that December/January was the peak and that we have been sliding into recession ever since then," [Martin] Feldstein, the president of the National Bureau of Economic Research, said on CNBC television.

Merrill Lynch North American Chief Economist David Rosenberg points out a simple but overlooked fact about economic growth: The US population is expanding 1.0 - 1.5% per year. Any GDP growth of less than that means that on a per capita basis, we are contracting.

Hence, the per capita ...

Ahead of the Tape - WSJ.com:

The National Bureau of Economic Research probably won't say this for months. But why wait? The U.S. economy fell into recession sometime in January.

The NBER -- a nonprofit organization of mostly academic economists -- puts official ...

�

The Spanish economy appears to have made a direct transition from boom to bust, just as Spanish economists are on verge of a direct transition from complacency to panic. Spain’s hard landing has now attracting the attention of European newspapers, who are full of stories of Spain’s economic ...

The United States isn’t Japan — people in Japan drive on the left hand side of the road, for instance, and eat with chopsticks. But somehow, with the bursting of the housing and credit bubbles putting financial firms on the gurney, the comparison keeps getting made.

“People say ...

John Berry continues to argue that things aren't so bad:

Recession Is Still a Possibility, Not a Reality, by John M. Berry, Bloomberg: The resilience of the U.S. economy in the face of a devastated housing sector and a financial crisis is amazing. The severe recession some have predicted is ...

Of course, he didn't anticipate the last Bear Stearns either. It might be worth pointing this out to readers.
This isn't a question of being rude, it's just a question of putting Mr. Bernanke's opinions in context.

The simple fact is that Bernanke has been continually surprised by every aspect ...

“By ...

Overall, the near-term economic outlook has weakened relative to the projections released by the Federal Open Market Committee (FOMC) at the end of January. It now appears likely that real gross domestic product (GDP) will not grow much, if at ...

The latest estimate of job growth from payroll giant ADP and forecasting firm Macroeconomic Advisers suggests employment isn’t booming, but it ain’t too shabby either.

Private nonfarm employment grew by a seasonally-adjusted 8,000 jobs in March, the report said, after declining by a revised 18,000 jobs the ...

Federal Reserve Chairman Ben Bernanke has uttered the “R” word. Responding to a question at today’s Joint Economic Committee hearing, Mr. Bernanke said publicly for the first time that “recession is possible” for the economy this year.

But he cautioned that a recession is a ...

There’s no doubt that the U.S. economy is in a downturn. The cost of petroleum has skyrocketed, creating all manner of ripple effects throughout the economy. The “housing bubble” has burst in several cities and the sub-prime mortgage industry has gone bust, leaving many people upside down in their houses ...

My colleague Jeremy Piger's recession probability index has been updated (previous) with the latest data - through January 2008:

As you can see, historically, ...

It's been tempting to think that maybe, just maybe, the U.S. could avoid recession. Perhaps some divine financial power might intervene and pull the economic coals out of the fire. But such hope, however remote in the first place, should now be packaged away in the file cabinet that holds ...

U.S. economic activity slumped to its lowest level in nearly five years in February, according to an index released by the Federal Reserve Bank of Chicago, which said the numbers indicate “an increasing likelihood that a recession has begun.”

The three-month moving average for the Chicago Fed ...

NEW YORK CSMONITOR---Don't look for an economic downturn in North Dakota: In fact, the state is holding job ...

USA Today tells us that: "It's been almost an article of faith: Any recession this year will be mild and brief."

That may have been an article of faith from those who get their economic outlook from tea leaves and other mystical processes, but those of us who rely on ...

"This is a substantial deceleration," the institute said. "World trade volume growth is on a downward trend." The last time annual growth in trade ...

The United States is "unambiguously" in a recession ... citing a nine-month decline in its weekly measure of the economy.

The Economic Cycle Research Institute, which correctly predicted the 2001 ...

From the WSJ's video center:

We just mentioned the CFO's saying the same thing yesterday.

Worth watching . . .

Source:
Most Economists Say Recession Has Arrived as Outlook Darkens
PHIL IZZO
WSJ, March 13, 2008
http://online.wsj.com/article/SB12053451945263
0845.html

That's the title of an article in today's Bloomberg. I think it highlights an interesting counterpoint between the statements coming out from the Administration, on one hand, and from academic and financial sector economists, on the other. From Bloomberg:

US Faces Severe Recession, Yahoo News, March 14: The United States is in a recession that could be "substantially more severe" than recent ones, National Bureau of Economic Research President Martin Feldstein said on Friday.

"The situation is very bad, the situation is getting worse, and the risks are that ...

The Census Bureau announced yesterday that the seasonally adjusted nominal dollar value of retail and food services sales fell by 0.6% between January and February, the worst monthly performance since June's -0.8% value.

The US is in recession – it's official. Well, maybe not quite official, but according to quite a few people like former US Treasury Secretary Larry Summers it is, while folk like Lehman Brothers are predicting negative growth for the first two quarters of this year – which would indeed ...

Damian Paletta reports on Congress.

House Financial Services Committee Chairman Barney Frank (D., Mass.) and his Senate counterpart, Chris Dodd of Connecticut, might not agree on all economic issues, but they did agree today on exactly where the U.S. economy is: in a recession.

"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.
...
The economists ...

The Financial Times wants to reassure us. Of course, they neglected to mention that their experts never saw the housing bubble or the chaos that its collapse would create.

--Dean Baker

A distinguished UCLA economist predicts that the U.S. will (narrowly) avoid a recession.

The mid-1970s recession “not only saw a sharp and sustained rise in food and energy prices, as is the case today, but also saw a very similar consumer balance sheet squeeze ...

Merrill Lynch economist David Rosenberg, one of the most bearish Wall Street economists, says to look past the 1990-91 recession as a guide to the current downturn. The key difference: the depth of home-price declines.

Mr. Rosenberg says in a note to clients that the current ...

There's been some confusion in a number of forums regarding our Recession Probability Track and what the probabilities it indicates really mean. Here's the inside scoop:

Nice interactive graphic at USA Today on housing and the economy, on a state-by-state, county-by-county MSA-by-MSA basis:

>

Click thru, then mouse over any state to get msa by msa results

via Mortgage Tip News

>
>

Source:

Lindsey:... Are we in a recession?

DeLong: Probably. If we are not in a recession we are teetering on the edge. The [q]uestion is: will there be a ...

The latest employment numbers suggest that the tide has turned.

Add yet another recession call to the mix. J.P. Morgan Chase says the latest decline in payrolls is enough — combined with drags from housing, credit and energy markets — to indicate the economy has fallen into a recession.

Chief economist Bruce Kasman, in a conference call ...

Lehman Brothers has joined the chorus of economists who say the economy is sliding into a recession.

“We now believe the tax rebate checks will arrive too late to prevent an outright recession. We look for modestly negative GDP growth in both” the first and second quarters of ...

NEW YORK (Dow Jones/AP) -- Home-mortgage lender Thornburg Mortgage Inc. disclosed Wednesday that its failure to meet a $28 million margin call caused a series of cross-defaults, and said that JPMorgan Chase Bank NA, which made the original margin call, will "exercise its rights."

Thornburg (TMA) shares ...

According to billionaire investment guru Warren Buffett, there is no denying that the U.S. economy is in recession. He recently declared unequivocally: "we are in a recession."

However, if you are thinking about stopping to spend on marketing read this warning from the Harvard Business ...

Here's a link to the new PDF version of the Beige Book. Here's the old html version.

The Wall Street Journal headline is "Beige Book Hints at Stagflation Amid Slow Growth, Prices Pressures"

I'm heading out the door, but I know what I'll be reading tonight.

Reports on retail spending were generally downbeat, although Boston, St. Louis, and Dallas described sales as mixed and Kansas City reported that consumer spending was "largely unchanged" since the previous survey period. The majority of Districts characterized sales as ...

Not a good start to the week week for those holding on to hopes that the U.S. will avoid a recession.

Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said today he expects slow growth in the first half of the year and “a good chance” the economy will begin to turn around mid-year.

As for whether the economy is in a recession, very slow growth or a slight ...

Although it is too soon to tell whether the ...

The U.S. isn’t falling into recession, and aggressive action to prevent one may only make matters worse further down the track, St. Louis Federal Reserve President William Poole said today.

Martin Feldstein says the Federal Reserve bears much of the responsibility for the current situation in financial markets:

Our Economic Dilemma, by Martin Feldstein, Commentary, WSJ [open link]: Although it is too soon to tell whether the United States has entered a recession, there ...

A recession is looming in the US. The Fed started a policy of aggressive rate cutting in an attempt to stall the downward spiral in which the US economy risks to be embroiled. Is this a repeat of the aggressive rate cutting of 2001 when the Fed, then under ...

Monetary and fiscal policy reactions to a possible economic slowdown have boosted the Congressional Budget Office’s prediction for real gross domestic product growth in 2008 by 0.2 percentage point, according to a letter from the agency released Friday.

In January, the agency estimated real GDP for the calendar ...

The latest ugly sign of an economic downturn: A sharp drop in consumer confidence. The University of Michigan’s consumer sentiment index tumbled to 69.6 in its preliminary February reading from 78.4 last month, marking its lowest point since February 1992 when the economy was emerging from a recession. ...

Here is the summary: GDP was up 0.4% during the quarter, after 0.8% in Q3. This is not too bad, give a potential growth of about 0.5%. Eric Chaney of Morgan Stanley writes there are some indications of a slowdown in domestic demand, dragged down by a poor performance ...

We never thought the euro area would decouple from the world. But we believe that the euro area is more resilient than some of the sentiment surveys and economic forecasts have been suggesting. The Q4 data, up 0.4% on the quarter, are actually quite good. The biggest regional drag ...

Max Wolff offers up a reasoned explanation of why we aren't going to get out of our mess easily, or soon. Soundbite: "Our recent economic performance was the offspring of financial innovation, low interest rates, massive consumer borrowing and asset price inflation. All is running in reverse now. The mechanics ...

Economists and others weigh in on the the unexpected increase in retail sales.

With the exception of a November result that was aided by an early Thanksgiving and early and aggressive pre-holiday discounting, retail sales have been on a weakening trend for several months. While the ...

Yesterday, I pointed to comments by William Poole. There were also similar remarks from Janet Yellen and Charles Plosser. Both remain concerned about inflation, with Plosser appearing to be more skeptical of the anticipated moderation of inflation coming this year. (Hat tip to Greg ...

William Poole says it's only a flesh wound:

Fed's Poole Says 'Best Bet' Is Economy Will Avoid a Recession , by Vivien Lou Chen and Anthony Massucci, Bloomberg: Federal Reserve Bank of St. Louis President William Poole said that the U.S. will probably avert a ...

"For the five most catastrophic cases (which include episodes in Finland, Japan, Norway, Spain and Sweden), the drop in annual output growth from peak to trough is over 5 percent, and growth remained well below pre-crisis trend even after three years. These more catastrophic cases, of course, mark the boundary ...

TWO in every five employers plan redundancies over the next three months ... [according to] the Chartered Institute of Personnel and Development ... Its winter labour market outlook ... is set to show that 38% of the more than 1,500 employers ...

The past couple months in retail real estate have been laden with more store closing announcements and news of retailers slowing expansion plans than we've seen in a long time.

If the next recession follows the pattern set by the three most recent downturns, a ...

January's Labour Force Survey release is (to me, anyway) an unexpected array of good news:

The economy isn’t even officially in recession yet, and already some are warning of a “double-dip”: a slump, followed by a brief recovery, then renewed slump.

“The policy cavalry has arrived and reinforcements are coming, in the form of the aggressive monetary and fiscal stimulus,” economist ...

U.S. wholesalers' inventories piled up at the highest rate in more than a year during December as sales plunged, a worrisome sign that unsold goods were piling up on shelves as the economy braked.

Wholesale inventories increased 1.1% at a seasonally ...

The impact of the U.S. housing slump is spreading in western Quebec's ...

Big news yesterday (e.g., WSJ, Abnormal Returns, and Paul Krugman), was the plunge in the January ISM nonmanufacturing business activity index. But what's it mean?

The next piece of major economic data comes in a week with the retail sales report for January. Reports from retailers already offer cause for concern. Capital Economics today offers another sign of caution, and it goes back to the surprise drop in the Institute for Supply Management’s nonmanufacturing index ...

The Institute for Supply Management reported that its index of service sector business activity declined to 44.6 in ...

Service sector activity contracted sharply in January for the first time since March 2003.

... the Institute for Supply Management reported that its January nonmanufacturing index moved to a reading of 41.9, from December's 54.4.

...The report showed still problematic inflationary ...

For all the talk by the Federal Reserve about "inflation targeting," we now see that responding to short-run problems is paramount for the Fed. Holding the line on inflation is something the Fed does when it is convenient. Resorting to inflating the ...

[M]acroeconomic policy should not be based on a panicky attempt to avoid a 2008 recession at all costs but on a forward-looking strategy that achieves the needed reduction ...

The debate today is not any longer on whether we ...

GDP increased by a paltry 0.6% in the 4th quarter of 2007 according to the Bureau of Economic Analysis. But there are reasons to be guardedly optimistic. First, real final sales were up 1.9%. Residential investment may be in the tank but households continue to consume ...

Behind Weak GDP ...

Fourth-quarter growth was weaker than expected, but not as weak as the headline suggested. Real gross domestic product grew at a 0.6% annual rate, well below the 1.2% consensus. But most of the surprise was in inventories, which actually declined.

The Bureau of Economic Analysis reported today that U.S. real GDP grew at a 0.6% annual rate in the fourth quarter of 2007, a weaker report than many of us had been expecting.

The economy nearly stalled in the fourth quarter with a growth rate of just 0.6 percent, capping its worst year since 2002.

The Commerce Department's report on the gross domestic product, released ...

By now, you have seen the news reports that GDP growth dropped dramatically to 0.6% in the 4th quarter of 2007 (see GDP Growth Slowed in 4th Quarter, As Housing Continues Its Drag - WSJ.com,

Gross domestic product rose at a seasonally adjusted 0.6% annual rate October through December, the Commerce Department said Wednesday in the first estimate of fourth-quarter GDP.
...
Aside from the housing slump, slowing consumer spending, inventory ...

Fourth-quarter growth was weaker than expected, but not as weak as the headline suggested. Real gross domestic product grew at a 0.6% annual rate, well below the 1.2% consensus. But most of the surprise was in inventories, which actually declined.

It’s rare for the level of inventories ...

We officially didn't enter a recession in 2007: GDP growth for the fourth quarter was positive, albeit very low at 0.6%. The main engine of growth is still consumer spending, rather than exports, but it's slowing, contributing 1.4 percentage points to GDP growth, balancing out housing, which subtracted 1.2 ...

Today's first guess at fourth-quarter GDP revealed what everyone already knew: the economy slowed sharply in the last three months of 2007 to a 0.6% annual pace in real (inflation-adjusted) terms, the Bureau of Economic Analysis reported. That's a world or two below the third quarter's 4.9% surge.

What's the ...

In January 2008 €-coin points to a marked slowdown in euro area underlying growth rate (0.38%, it was 0.54% in December). The sharp drop in €-coin is due to the dismal turnout in stock markets this month and weakness of industrial productions recorded in November.

�

An economic model based on the unemployment rate and jobless claims signals that U.S. recession odds may now be as low as one-in-six, much lower than what many prominent economists including Alan Greenspan think.

The model was developed by Tim Kane, chief labor economist for the ...

And, just as the president and lawmakers have done back in Washington, McCain unveiled a new economic stimulus plan… We have some tough times ahead," ...

There was also some interesting action on the Intrade betting exchange this week.

Harvard professor Jeffrey Frankel, who sits on the National Bureau of Economic Research committee that dates recessions, says he doesn’t know if the economy is in such a downturn yet. He notes, as his colleagues have, that the committee generally can’t make that determination with ...

Peter Orszag, director of the Congressional Budget Office, testified before Congress Wednesday on the agency’s economic and budget outlook.

Stanford economist Robert Hall, chairman of the National Bureau of Economic Research committee that dates recessions, is far from announcing whether such an event has started. But he and his colleagues on the NBER’s Business Cycle Dating Committee have taken a key step: The usually dormant panel has started ...

The Federal Reserve doesn’t expect the U.S. to enter recession, Chairman Ben Bernanke has said, and a model developed by his staff appears to back him up. The model, according to a private firm that attempted to reproduce it, appears to put the odds of recession at ...

Justin Lahart writes in today’s Outlook column about how deep a recession would be — and readers are asked to give their predictions at bottom.

The combination of heavy debt loads, still-high energy and food prices and a weakening job market has households tightening their belts. Consumer spending, long a bulwark ...

Monetary policy affects the economy with long and variable lags. This much we know. How long depends on the state of the economy in question.

In 2001, the US got away with an unusually short recession helped by aggressive interest rate cuts and an expansionary fiscal ...

Economists have predicted nine of the last five recessions.

A recession in 2008 isn’t official yet. But with unemployment rising and stocks falling — including a 4% drop in the Dow Jones Industrial Average last week — many economists, including former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Lawrence Summers, say the U.S. is probably in a ...

While economists and others debate the prospects of a recession in the United States, employment data suggest recession has already arrived or is knocking on the door of a few Midwestern states. The latest state to hit the economic ...

The U.S. is probably in or about to enter a recession, former Federal Reserve Chairman Alan Greenspan said.

As the country contemplates a recession, economists are wringing their hands over a slow-down in consumer buying.� About two-thirds of the economy is driven by consumer purchasing.� Without that engine, economists fear that the economy will be in serious trouble.

But I haven't read much about the role that debt will ...

In a recession or a crisis, the right approach for individuals is to save. So too for the national economy. A looming recession will prompt a pullback in consumer spending as a rational response to the perception of economic troubles. This action does not cause the ...

Former Federal Reserve Chairman Alan Greenspan said the U.S. is probably in or entering recession in an interview with The Wall Street Journal. Mr. Greenspan is also signing on as an advisor to hedge fund Paulson & Co. Inc. which made a fortune last year betting ...

I spent an hour yesterday listening to three economists (Brad DeLong, Mike Mandel, and William Beach) discuss our current plight. I found their insights compelling. Areas of agreement, included:Don't look to the US Government for effective Fiscal Policy Help — particularly in an election year Don't look to the Fed ...

U.S. Treasury Secretary Henry Paulson said the U.S. economy slowed "rather materially" at the end of 2007, and any stimulus package should be put into effect quickly.

"We are looking at things that could be done quickly," Paulson ...

U.S. Consumer faces "Challenges"

Housing is "by far" the most serious risk to the economy.

Economy slowed "rather materially" at ...

The Joint Economic Committee plans to hold its first hearing of the year next week, and the focus will be “What Should the Federal Government Do to Avoid a Recession?”

The committee, chaired by New ...

The news articles today all report on how the country's leading economists now believe that we currently are in, or soon will be in, a recession. This is big news, in fact it's bigger news than the reports suggest. As I've written in the past, economists have an enormous bias ...

Many people are finally saying the R word: Recession. The fundamentals don't look good. The externals are even scarier: dollar and stocks skidding, gold and other prices (particularly producer prices) rising. But what has tipped the psychological scales is the statistic no one has cared much about in many years: ...

With recession calls becoming more frequent ([1], [2], [3], [4], [5]) it might pay to revisit the indicators that the NBER looks at in determining the turning points in recessions (The fact that NBER put up some new recession-dating-FAQs just a couple days ago ...

Telegraph:

The US has entered its first full-blown economic recession in 16 years, according to investment bank Merrill Lynch.

Merrill, itself one of Wall Street's biggest casualties of the sub-prime crisis, is the first major bank to ...

“Over the past few months, we have become increasingly concerned that the U.S. housing and credit market downturn would trigger not just a growth slowdown and substantial Fed easing — our long-standing view — but also an outright recession. The latest ...

The US has entered its first full-blown economic recession in 16 years, according to investment bank Merrill Lynch. David Rosenberg, the bank's chief North American economist, argues that a weakening employment picture and declining retail sales signal ...

The European Commission latest monthly economic sentiment survey shows that the euro area remains relatively robust, though in Spain sentiment is deteriorating rapidly, the FT reports. The findings appear to support the European Central Bank's view that the credit crisis has left the euro area economy relatively unscathed so ...

�

�

North America remains the global economy’s hub. Any assessment of the world economy in 2008 depends on the likelihood, depth and length of a US economic downturn and the magnitude of a global spillover. Any forecast is thus contingent on how we answer the following three questions. ...

Many analysts gathered at the American Economic Association's two-day annual meeting spoke of a recession as almost a given but differed over how severe it will be.

Many analysts gathered at the American Economic Association’s two-day annual meeting spoke of a recession as almost a given but differed over how severe it will be.

“The recession is likely to be a serious one,” said Dean Baker, co-director of the Center for Economic and Policy Research. He ...

No cheer for the New Year from the numbers released this week.

In today’s Journal Greg Ip looks at concerns that inflation fears may cause the Fed to hold off on rate cuts.

The Fed thinks inflation is a bigger risk than it was in 2001, and bigger than Wall Street and many prominent economists think. That forces the Fed to ...

A surprise tumble in the Institute for Supply Management’s index of manufacturing activity indicates the sector is contracting, adding to worries about the economy’s course in 2008.

“This is an early warning signal for manufacturing that there is softness,” said Norbert Ore, a Georgia-Pacific executive who directs ...

Economists and others weigh in on the the contraction in manufacturing activity reported by the Institute for Supply Management.

This is not yet a recession signal — that would require ISM readings in the 40-45 zone. But it clearly moves recession risks higher. Manufacturing output almost certainly fell in the ...