Economics Topics
Economics Topics
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Recession?
I remain somewhat concerned about the current slow down and/or recession. I remain very concerned about inflation. If you are an entrepreneurs, it is time to prepare for the worst. Here is a summary of a talk I gave to a group of printing company owners yesterday.
To ...
From WSJ, Henry Pulizzi and John D. McKinnon write:
In just the last 10 days, the odds of a recession have fallen from 60% to 30%, based on futures trading on Intrade.com (see chart ...
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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.
Consumer spending was up ...
Economists and others weigh in on the 0.6% growth in first-quarter gross domestic product.
The uptick in first-quarter GDP may raise questions about the likelihood that an official recession will be declared. However, there is a common misconception that two consecutive quarters of outright declines in GDP defines ...
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 ...
Over at intrade, the probability of a recession in 2008 has fallen to 25 percent in the latest trade.
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 ...
The Brisbane Times is reporting Property market grinds to 'screaming halt'.
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 ...
He writes:
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.
Feldstein also said he thinks the ...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 ...
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. SpainÂ’s hard landing has now attracting the attention of European newspapers, who are full of stories of SpainÂ’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 ...
For the recession that started in April 1960:
“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 isnÂ’t booming, but it ainÂ’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 ...
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Via email. Not yet published in the news media...but some will pick it up later today:
Mar 24, 2008 11:08 AM
Digging ...
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 ...
The Financial Times is reporting World trade decelerates almost to standstill.
"This is a substantial deceleration," the institute said. "World trade volume growth is on a downward trend." The last time annual growth in trade ...
From Reuters: Leading index shows US economy in recession, ECRI says
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 ...
Click on graph for larger image.
This ...
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
In ...
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 Economist’s R-word index, which counts the stories in the New York Times (NYT) and the Washington Post (WP) that use the word recession, reached a seven-year high ...
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 ...
From Peter ...
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:
Political Calculations' Recession Probability Track is based upon a recession prediction model developed by Jonathan Wright of the Federal Reserve Board. Our ...Nice interactive graphic at USA Today on housing and the economy, on a state-by-state, county-by-county MSA-by-MSA basis:
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Click thru, then mouse over any state to get msa by msa results
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Source:
From Professor DeLong on Bloomberg TV: Are We in a Recession?
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.
Consumer Spending:
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 ...
Feldstein writes in the WSJ: Our Economic Dilemma (hat tip rtalcott)
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 ...
The National Federation of Independent Business Index of Small Business Optimism fell 2.8 points in January to 91.8 (1986=100), the lowest reading since January 1991.
But some of the underlying numbers related to employment are not as weak as one would expect to see when optimism is so low.
"The Index ...
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 ...
Reality is finally sinking in elsewhere, including Treasury Secretary Paulson. Consider G-7 Growth Warning May Prompt Additional ...
"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.
See the brief article for ...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:
December's employment data was revised upwards from a loss of 18,700 jobs to one of 2,900 Employment increased by 46,400 in January The employment rate increased to 63.8%, yet another new record. Full-time employment went up; part-time employment ...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 ...
Recoupling Canadian Style
Canada Economy Reels as U.S. Slowdown Cuts Factory Orders, Jobs
The impact of the U.S. housing slump is spreading in western Quebec's ...
The title says it all. The report reviews recent economic data and ...
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 ...
"U.S. employment unexpectedly tumbled last month for the first time in more than four years, fueling worries that the U.S. economy which ...
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 ...
As Nouriel Roubini says, quoting himself,
The debate today is not any longer on whether we ...
The US should face its need for adjustment with courage and reason, not fear. It should stop behaving as the whiner of first resort, ready to waste all ...