Thursday, August 27, 2009

Recession not over, despite signs of improving economic environment

Simply put, GDP has declined - ergo the recession is not over. Since GDP is measured quarterly, we can't tell if in the last few months GDP has pointed upwards, only that the decline was not 'that bad'. Since globally there are countries which have recovered, there's enough reason to assume that 3 months from now the recession would be declared 'over'. That is, unless a sudden more horrific decline will occur - which is very possible considering enough negatives and potential hazards including political ones.

GDP declines 1 percent in 2Q, better than expected
The economy shrank at an annual rate of 1 percent in the spring, a better-than-expected showing and more evidence that the recession is drawing to a close.

Many analysts believe the economy is growing in the current quarter, but they caution that any rebound will not be accompanied initially by rising employment. Jobless claims figures released Thursday were better than expected, but remain well above levels associated with a healthy economy.

The Commerce Department's new estimate for the gross domestic product was unchanged from the initial figure it released last month. The drop, while representing a record fourth consecutive decline, was far smaller than the previous two quarters. It also was stronger than the 1.5 percent decline that private economists expected.


Intriguing, dangerous times
Cheers

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