Recession is NOT over!

The National Bureau of Economic Research, the organization which dates recessions, cannot declare the end date of this recession, according to the New York Times.

The committee plans to announce on Monday that it cannot yet declare an end to the recession that began in December 2007, several members indicated on Sunday.

The green shooters assuredly will be taking their Prozac with this news.

The Wall Street Journal:

A committee of economists at the nonprofit National Bureau of Economic Research, arbiter of when U.S. recessions begin and end, plans to issue a statement Monday with its latest assessment of the economic downturn that began in December 2007.

Members of the Business Cycle Dating Committee, which met last week, wouldn't say if the announcement would declare the recession over or simply lay out its interpretation of the latest turn in the economy after nonfarm payrolls rose in March.

The main concern is the possibility of a second contraction, known as a double dip, later in the year. Anyone reading this site knows the many economic indicators, which determine the NBER's dating, have been at best, a mixed bag, with job creation and employment not just lagging, but DOA.

A depression is defined as a prolonged recession, typically 3 years but can be recatagorized when a recession extends past 2 years. The start of this recession is December 2007. The undeclared end date of this recession in July 2009. If July 2009 is the declared end date, that would make this recession 19 months long.

The fact NBER isn't willing to declare it so, validates what we have been seeing in the various economic indicator reports discussed on this site.

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CRB 500yrs,v. 'slave'prices?

See 500 years of silver etc prices.
What is the "CRB commodity" since 1449 measured in, 30g of SLV?
(ritholtz, 4810). Caesar's legions grabbed slaves (old style,
not 'debt slaves?)
for free? C 1860 a good bonded worker cost...$1500 in
metal coin of the realm. What next?

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I think you meant to comment

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Robert Gordon dissents

A NBER committee member dissents and thinks it's ridiculous to not declare the recession over.

There are a few things really interesting in all of this.

Firstly Gordon claims a double dip, which is 2 quarters of negative GDP would be the start of a 2nd, new recession.

(really?) and most believe negative GDP of 2 quarters is highly unlikely...

but here's the deal, one needs about > 2% GDP growth every quarter just to maintain the status quo.

So, is low positive GDP really negative?

Then, NBER is talking a lot about GDI, or gross domestic income and it's low, Americans have not recovered their money here.

I think that's damn swell NBER is focusing in on income as well as unemployment, maybe somebody out there realizes it's a national economy, for the citizens. Not just a few short term profit statements or large businesses.

Anywho, I think the NBER is correct to not declare a recession end date. The data is too weak, too mixed and we have some indicators that are not behaving as they have in the past, most notably productivity, jobs, to GDP numbers.

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False Positive?

Isn't what positive data they do have do directly from Government spending? It wouldn't seem to be reality based to declare a recession over if thats the case but then again reality appears to have little to do with the goings on at top levels.

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some, but that's not the real thing

The real reason for the blow out Q4 2009 GDP numbers was inventory adjustments, which isn't much of the "real" economy per say, it was the slope of decline dramatically decreased. i.e. inventory gutting was over.

The NBER is a group of economists and business cycle experts and this is all technicalities.

There is some good evidence on Industrial production, but it's relative, it basically cliff dived died, so signs of life do show a dramatic increase, but the slope up is consistent at this point.

Check out this forum category, macro economics. I write up, try to show graphs on all of these data elements which determine business cycles.

There is a good discussion on what components make up GDP and I noticed I'm relatively ignoring GDI, so I plan on doing a post on that one to get it up to date.

So, you cannot say it's just "Gov. spending" and really, if you look at the overall GDP components, which I do in those posts, esp. those on GDP, you'll see the overall breakdown.
That said, a lot of the "double dip" worries are due to Stimulus funds drying up with nothing to replace them. That is enough to dip GDP negative potentially but that's because in terms of real growth, it's not robust.

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So Companies Were Forced to Restock

I understand.

You can only get the shelves so bare and then you have to buy fill them again at least a bit. So given that that type of activity will be more gradual now it won't show a spike again.

Frankly I was happy with the stimulus this year which was supposed to involve a lot of rebates for new energy efficient equipment sales but it looks like thats already been expended, less then 4 months into the year.

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not restocking per say

getting them down to the bare bones and then leaving them there. A true inventory build up would imply they believe future sales will dramatically increase, but this was a stopping or a dramatic slow down of the inventory "blood letting".

I have charts, if you look at the Q4 GDP post and it becomes way more clear what happened with a chart.

I wasn't because Caulk is made in China and you can give every person in the U.S. a tube of Caulk for $300 million dollars and that's full retail price.

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Robert you and me and we all know it

but now the government has to accept it. But their strategy is to deny, deny, deny and to send pieces of propaganda out for the news to print and speak.

The gov is just willy-nilly throwing a $million here and a $billion there and crowing "we are doing this for you."

Meanwhile the "you" in the equation keep sinking lower and lower. They are actually going to revive the cap and trade. A Bill that even the President said would raise the energy cost of Americans.

I'm starting to wonder if they don't want to kill the small $$$-amounts remaining in our bank accounts.

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"comprehensive" immigration "reform" too

and that means loaded for bear with H-1B, L-1, other guest worker Visas and now this instant green card for anyone who gets anything labeled education (varies in requirements), focus on STEM, where we already have massive unemployment and displacement. Additionally even getting into college is very rough currently. The rejection rates are through the roof.

I'm fairly certain most of the country does not want the U.S. labor pool flooded with supply and I'm fairly certain most want Americans to be first in educational opportunities in the U.S. and folks, please do not post those spin papers trying to make the substitution variables set to zero. that just isn't reality by the statistics.

I watched a news report with some "immigrant" rights person claiming Arizona raids on human traffickers/smugglers was "discriminatory". (there was a big human trafficking ring bust yesterday). There is no sanity in this topic. These human traffickers charge $7,000 and up per person, often kidnap the people and extort more money from families, abuse them, treat them like cattle and cargo. How can anyone be for human trafficking? Seriously.

Cap & Trade is one of those topics which one would think will divide along party lines but my understanding on the details is it gives a new fictional trading market to Goldman Sachs. Billions expected to be made in trading credits. So while I'm fairly certain on this site at least most want environmental clean up, alt. energy, reduce global warming and so on, so far my understanding on Cap & Trade is they are using that general wish to of course get a bunch more $$ for a few "traders".

But on this post, the NBER, it is more of a science, which I like. This is taking a host of metrics and determining business cycles. The fact they wouldn't bow to pressure is a good sign to me the group has some ethics.

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I have yet to meet

someone that says, I am against cap and trade and love dirty air. In fact I don't think I've ever met someone that likes air pollution. The differences are in how to go about keeping it clean, how fast, how costly, etc.

In the early 70's when I was in the LA basin it was always a messy looking sky full of pollution. Last time I visited, it looked a lot better.

today, this very day the gov could force everyone to go solar, passive and photovoltaic with battery back-up. It would release us from a lot of cool and oil. The problem, the cost would be enormous and create chaos to the people's financial well being.

There will be a day that you will see solar all over the place but it will happen in baby steps. Most things outside of war are done in baby steps.

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What's the Point of Market Rather than a Tax?

IMO all a market does is increase costs to feed a middleman which in this case will be Goldman Sachs.

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that's my understanding as well

I haven't researched out the entire Cap & Trade but last things i dug around in found it to create basically another exchange where financial sectors, i.e. GS, JPMorgan Chase, our usual suspects were going to rake it in on fees.

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Actually

I'd have to dig this up but the national cap and trade market has already been created just waiting for the bill to come about and guess who owns it? Goldman. I'll dig up that source.

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