Dude, Where's My Recession?

Recession politics

With Iraq trending down as a political issue, left-leaning pundits have seized on recession predictions to bash Bush and promote their presidential candidate (typically Obama).

As a result, business reporting has morphed in the last 6 months from glassy-eyed cheerleading to rabid anti-Republican fearmongering.

Never before have so many pundits scrutinized so many economic data so closely for signs of recession.

evilrepubscauserecessions of MA @ May 01, 2008 09:34:39 AM

Does inflation impact growth numbers?

IIRC, the entire "growth" for March came from inflation increased spending on gasoline, attributable to higher prices, not higher consumption. If people cut back on spending in housing and construction, appliances, cars, food, and clothing (which they did), where is the growth coming from?

And if bumping the inflation rate up (again, going by memory, the real inflation rate was 9.3% last year when food and energy were factored in) is the only way to increase GDP growth, then aren't we in a recession, particularly if wage growth is lagging behind? If the GDP isn't adjusted for inflation, then a hyper-inflationary economy would look like it was experiencing massive growth, no? Yet it would be a terrible economy in reality. And Greenspan and Bernanke both have been trying to counter deflation by promoting inflation.

I could be wrong; maybe the GDP is adjusted for inflation. Does anyone know?

Ella of OK @ Apr 30, 2008 14:47:37 PM

Now this is anecdotal, but here's some food for thought. The hottest game for spring, Grand Theft Auto IV, has just been released and analysts are predicting that this game can rake in over $300 million. Now, that is a conservative estimate, as I believe the game can rake in even more. Also, I just came back from Universal Studios Hollywood and in the one day I was able to spend there, I would have to estimate that there were well over 100,000 people there. Now, if we are in a recession the very first thing that should be cut back on is discretionary spending. Yet people are spending money like drunken sailors. Are some areas of the economy hurting? You bet. Is the entire economy in a recession? I don't know, but it seems people aren't acting like it.

Chris of AZ @ Apr 30, 2008 13:21:17 PM

NBER

Not only has the NBER never declared a recession without the economy shrinking, they have never declared a recession without two quarters of negative GDP. Not necessarily consecutively, as the rule of thumb goes, but there have always been at least two negative quarters connected to an NBER recession.

However, whether the NBER declares a recession or not, it's pretty clear that the economy sucks right now.

Steve of CA @ Apr 30, 2008 12:32:58 PM

Silly premise

cooked numbers along with double cooked numbers on unemployment.Been in RE. for 40 years , you ain't seen nothin yet.Takes a long time (you call it lag) for RE to crash, so stop the silly stock market thought patterns and get ready for many .6 quarters of cooked numbers.How can there be an expansion with RE equity declining every year , not gonna happen , it's going to be a bumpy ride...

g Bell of KS @ Apr 30, 2008 11:41:21 AM