Is the Recession Over?

by: Don Fishback

According to the economist quoted in this Bloomberg article, maybe.

Personally, I’m not about to hang my hat on any single indicator. To make a recession-ending call, I’ll look at the four “coincident” economic indicators, just as I did when I accurately called the recession. I don’t want to gloat, but this call was months ahead of the officials charged with dating recessions. And it occurred during a time in which the official GDP stats were positive. For what it’s worth, not one of the four indicators has shown any signs of turning up. But then, they won’t show signs of turning until they actually do.

One thing to ponder if this economist is right. According to an analysis by CNN, of the stimulus that has been budgeted to be spent, only a sliver has been actually spent. In other words, the economy is still operating on the massive bailout and stimulus spending from the Bush administration. With the exception of 14.5 billion of stimulus dollars going mostly to Medicaid reimbursements to the states and bailout money to the automakers, the Obama administration’s even more massive stimulus and bailout money has yet to be spent. If this economist is right and the economy has turned even before all this stimulus actually kicks in, then what’s going to happen? Perhaps that explains the recent runup in oil prices even though the market is awash in the stuff.