OECD Revised Economic Outlook

The OECD has revised it's global economic outlook for the rest of this year.

The OECD forecasts economic growth across the Group of Seven countries to fall by 3.7% this year, a less brutal contraction than the 4.1% drop projected in June 2009. The latest GDP forecasts for this year provide slightly improved outlooks for Japan and the Euro area, an unchanged overall projection for the US but point to a gloomier situation in the UK.

Now note the OECD has the U.S. GDP growth projections unchanged at +1.6% for Q3 2009 and +2.4% for Q4, 2009. But what is interesting is Q3 is within the margin of error of 1.9% and Q4 projections are at the margin of error, 2.4%.

Krugman Defines a New Economic State - Purgatory

Good job Krugman. On George Stephanopoulos' show, Krugman amplified a much needed new term for the state of the economy, purgatory!

We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering.   Either you're in hell or you're in heaven.   And the trouble is we're actually in purgatory.   We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer.   But almost surely also we're still losing jobs.   The unemployment rate is going to continue to rise.   So we're in that infamous jobless recovery state.

United States GDP, Q2 2009 in at -1%

I know it sounds like an oxymoron, but this number is actually better than expected news.

The estimates were -1.5%. From the BEA:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 1.0 percent in the second quarter of 2009,
(that is, from the first quarter to the second), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 6.4 percent.

Ok, now let's go digging into the details.

Firstly, what is GDP?

GDP = private consumption + gross investment + government spending + (exports − imports), or, GDP = C + I + G + (X − M).

So, why was the drop only -1% instead of the -1.5% expected?

The Wall Street Journal Argues for Brown Weeds

Here on the Economic Populist, dueling posts of green shoots, i.e. the recession is at a bottom and recovery will happen and brown weeds, i.e. it's getting worse and is most assuredly not a recovery, has been going on for some time.

Well, the Wall Street Journal, that holy bible of finance readers everywhere has stepped in and pronounced the ground salted and barren.

In the article, WSJ points out the average length of unemployment is higher than it's been since government began tracking the data in 1948.. The article then goes through the jobs numbers and shows why the real rate is much worse than what is being reported.