The Recession Began in Q4 '07, Is the End Near?

 

U.S. economy contracted in fourth quarter - MarketWatch.

Revised figures show the U.S. economy had negative growth in the 4th quarter of 2007, signaling the start of a recession. If this is the case we are now into the 4th quarter since the start of the recession and approaching the average 10 month post WWII recession length. Note: the longest recession of the modern era is 16 months (twice).

Growth in the 1st quarter of 2008 was 0.9% and the second quarter is now quoted at 1.9% growth. It seems the U.S. economy is clawing out of the lows of late 2007 and early 2008. Let us see if the 2nd half of 2008 show enough growth to signal the recession’s end.

It appears this will be a modest pull back by historical standards but the psychological impact has hit the national psyche very hard. I think this recession has been rooted in the housing pull back which literally hits people where they live. Also, the current nature of the Internet feeds into the fears and negativity of many.

At this point both the stock and housing markets will be well on their way to recovery by the time many of the “it’s different this time” crowd give up on their pessimism. But isn’t is always so?

Comments

[billb:]

"A significant decline in economic activity. In the U.S., recession is approximately defined as two successive quarters of falling GDP, as judged by NBER."

I count only 1.

2008 Jul 31 04:02 PM

[whidbey:]

You don't look like Miss Goody two shoes, and you don't look like a pumpkin head, but you write like both of them. Go peddle your rose buds on some corner where folks are deaf and dumber than you, if there is such a place.

2008 Jul 31 04:58 PM

[bearfund:]

It's not different this time. Not better, not worse. Same old problems, same old results. The GDP data is in the noise; whether it's negative or positive makes little difference. The latest GDP deflator is an obvious fraud. But all I really need to look at are the trade and budget deficits. These are to a nation what cash flow and balance sheet statements are for a corporation. More debt, more losses in trade? Keep shorting.

2008 Aug 01 12:09 AM

[Bill W.:]

Tim, you really need to get out more often.

2008 Aug 01 11:12 AM

[Elaine Supkis:]

Japan's export economy grew by over 5% a year for six long years and pushed Japanese export corporations to the top of the global heap. During this, the WORKERS of Japan had a vicious, grinding depression with dropping wages. Now, they have inflation with dropping wages.

The US top export marketeers are seeing growth and are very happy. The US WORKERS are now deep in a grinding depression with dropping wages, dropping house values and huge energy and food inflation. This is why talking about 'an economy' is very childish. Where do these commentators come from? A kindergarden for heavily disconnected, spoiled children?

2008 Aug 01 02:08 PM