Posted by: Greg T. Spielberg on August 03
It’s likely we’ll debate the end date of the recession until America’s downturn has come and gone. The official designation – “recession” – is a lagging indicator anyway, declared by the Cambridge (Mass.)-based National Bureau of Economic Research (NBER) after two consecutive quarters of GDP decline. The bureau’s announcement came in 2008, many months after Americans realized insurers and banks were wracked with toxic assets. Expect the same delay in declaring the end too.
For now, our economic future is open for debate. The U.S. Gross Domestic Product declined only 1% in the second quarter, giving traders cheer and the stock market a much-desired boost. The Dow is up roughly 800 points since early March when it fell so deep it may have touched hot liquid magma.
The NBER doesn’t take into account the market, but we often do when gauging the country’s economic health. If the Dow hits 10,000, there will be a surge to declare the end of the recession – or at least to start spending, borrowing and lending like it’s over.
Or not. Depends on your outlook. How do you weight the ocean of economic information each day? Do you place more importance on employment figures or company earnings? Manufacturing or tech? Where is America’s economy stealing off to and can we sign a warrant for the recession’s arrest?
This is the discussion going on in BusinessWeek’s Debate Room. Reader JP says the economy will continue to suffer. “A jobless recovery is no recovery,” he writes. James Angel of Georgetown’s McDonough School of Business argues, “Financial markets are already signaling that the panic phase is over.” Where do you stand?
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.