Posted by: Peter Coy on May 30
With the U.S. economy in such a deep valley it seems absurd to think that the recession may already have ended. But Paul Dale, the U.S. economist for Capital Economics, says that according to the firm’s recovery index, there is a 1 in 3 chance that the recession ended in April. That’s up from a 1 in 10 chance that it ended in March.
Capital Economics’ estimate is based on the performance of a wide range of leading indicators. Dale says in a May 29 report that “24 out of the 29 indicators that tend to lead the economy out of recessions are now higher than the trough they had reached in this cycle.”
Keep in mind that even if the recession did end in April, it doesn’t mean things are great. In economists’ terminology, the recession ends on the day that things are at their very worst—i.e., when the economy gets to the bottom of the valley. But it could be a long while before the economy climbs back up to its previous height. In fact, Dale says, “a strong and sustained recovery is still some way off.”
BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.
See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.