UCLA Professor Ed Leamer recently proposed four criteria for determining whether the economy is in recession, and concluded at the time of his study (two months ago) that the U.S. had not yet crossed that threshold. But this week’s data might cause him to change his mind.
Category Archives: recession
Updating euro-area GDP forecasts
Here I relate some interesting new research on how to update economic forecasts with incoming daily data and the latest assessment of where things stand in Europe.
Auto sales deteriorate further
U.S. auto sales have been dismal for most of this year. And they just took a turn for the worse.
Real GDP likely fell in Q3
Calculated Risk observes that we already know the values for a significant chunk of 2008:Q3 GDP. And it doesn’t look good.
Gross domestic income and recessions
The “final” values for 2008:Q2 GDP released by the Bureau of Economic Analysis on Friday were more disappointing than the earlier estimates. Still, the 2.8% annual growth rate for real GDP that we’re now told characterized the second quarter doesn’t sound like a recession. Or does it?
Back to the Real Side of the Economy: Recession Watch
Only on a day like today does an over 1 percent decrease in industrial output move to third page. But this item (and this hilarious article h/t Economists View) reminded me to update the indicators used by the NBER BCDC are headed. Their trajectories are, in general, not too comforting.
Recessions and Output Gaps, Updated
In “Redefining Recession”, The Economist discusses some of the difficulties in interpreting the “R” word. Since the article juxtaposed output gaps against the conventional NBER definition, I thought this would be a good time to update my post on output gaps, using the latest GDP data, CBO estimates, augmented with the latest WSJ survey of forecasters.
Trade Deficit Reduction via Changes in Exports, Imports or Prices
Today’s July trade release was a little bit of a surprise, due to oil [0]; Haver covers the numbers. Calculated Risk discussed the release, and actually took the outcome as a fairly positive, albeit with some anxiety about whether exports will keep up the robust growth necessary to continue shrinking the deficit.
I want to focus on a couple of other aspects of the release which seem to make me worry a bit more.
Taylor Rules, Synchronized Recession and the Potential for Competitive Depreciation
In yesterday’s FT, “All in this together” assessed the possibility of a roughly synchronized downturn in the world’s major economies, with the United States, ironically enough, suffering the smallest hit. This brings up all sorts of interesting questions regarding exchange rates, if one believes that Taylor rules define monetary policy making to some degree, and that interest differentials affect exchange rates.
Three Pictures from the August Employment Situation Release
The employment situation release seems like old news, and Jim has already teased out some of the most important aspects in his post. However, I thought a little more context would be useful, given that some observers still think a recession can be avoided. From the White House economy fact sheet (accessed 9/7/08):
On September 5, 2008, the Bureau of Labor Statistics released new jobs figures for August. Nonfarm payroll employment decreased by 84,000 jobs in August, and the unemployment rate rose to 6.1 percent. While these numbers are disappointing, what is most important is the overall direction the economy is headed. Last week, the economy posted a strong gain of 3.3 percent at an annual rate in the second quarter, led by growth in consumer spending, exports, and a well-timed and appropriately sized stimulus package. This level of growth demonstrates the resilience of the economy in the face of high energy prices, a weak housing market, and difficulties in the financial markets. Orders for durable goods have been rising in recent months. In addition, productivity growth over the past four quarters has been strong at 3.4 percent — above the averages for each of the past three decades over the course of the Administration.
See as well [1].