We now have three very reputable markers that signal the recession's end.
1. According to the U.S. Weekly Leading Index published by the Economic Cycle Research Institute (ECRI), that index growth has steadily risen to a 36-week high.
2. You've seen the pointer here for several weeks now that the "lagging peak" in new claims for unemployment is shown to be quite accurate in predicting past business cycle rebounds. With current continuing claims declining again last week, it is almost certain that we've now seen the lagging peak of this recession.
3. The ISM Manufacturing index that we've been following since the beginning of Feb, shows a likely return to GDP growth. The ISM reported that index at 42.8% on Monday. You may want to go back and check our trend-line from our March 2 post remembering that according to the ISM an index reading "in excess of 41.2 percent, over a period of time, generally indicates an expansion of the overall economy."
It is increasingly obvious that the 'green shoots', have grown leaves, and no doubt will blossom this summer. Professor Hirschey got it just right.
Monday, June 1, 2009
Three Clear Markers: The Recession is Over
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Do you agree with Califia Beach pundit that the Obama policies have had nothing to do with the recovery and that it would have been better not to pass the stimulus or do you think these policies have contributed to overall consumer confidence and optimism that have contributed to the recovery?
ReplyDeleteI don't agree with Scott's blanket negativity toward Obama's policies. I believe that swift action on the part of both the Bush and Obama's treasuries headed off a signficant depression. History very clearly demonstrated what happened when the Hoover treasury did absolutely nothing. I do agree however with many of Scott's observations about current conditions.
ReplyDeleteI guess it doesn't matter what I say, huh? ;-)
ReplyDeleteI think is fair to say if the economy recovers, and it maybe doing that, it will be inspite of the "Stimulus Package" not because of.
ReplyDelete@rdasher,
ReplyDeleteYou may be right, however what was clearly documented in the New Deal era is that the strength and duration of the recovery was direct a result of federal stimulus policies... government directed investment. The Tennessee Valley Authority stimulated a whole new microcosm in that area...or have a look at the history of Magic Valley -- a region in south-central Idaho. These areas and their thriving micro-economies would not exist today had it not been for the foresight and stimulus dollars of the US government during the depression era.
There are already many similar projects to point to this time around. And our children will thank us for indirectly supporting them.
GNE
Is recession really over. Market has improved to a certain extent but it is still down. Isn't it?
ReplyDelete