It’s Not A Recession Unless They Say So

Posted by: Howard Silverblatt on June 12, 2008

The upwardly revised Q1 GDP to a 0.9% gain, on top of the 0.6% Q4 2007 gain, will make it difficult for the National Bureau of Economic Research to officially label this as a recession. However, with payrolls dropping for five consecutive months, higher unemployment, business investment weak, lower home sales and prices, global inflation creeping in, increasing food prices and shortages, on top of $134 oil, it should be easy for anyone who isn’t an economist to call it a recession. And that is why the consumer has pulled back.

The stimulus checks are like giving one last fix to a junkie. They’re happy and spending for now, at least according to this mornings 1.3% gain in the May retail numbers, but who is going to give them their next fix? Can you say deficit spending or tax increase? How about, have no fear, congress is here?

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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