Bad jobs report.
Disappointing housing report.
Lower GDP growth from the end of last year to the beginning of this year.
Tanking value of the Euro.
Slowing consumer spending.
Stories abound in the financial press this morning because of the disappointing data, asking the question: Are We Headed For A Double Dip Recession?
Barry at Big Picture thinks the following:
This is, historically speaking, normal. ECRI’s Lakshman Achuthan told Newsweek: “You always have a spurt in growth out of recession and then you throttle back. But we’d need to see a pronounced, pervasive, and persistent decline in the level of the leading indicators to start talking about recession risk.”
That “pronounced, pervasive, and persistent decline” is simply not present. Indeed, double dip recessions are actually rather rare. As Yale Professor Robert Shiller pointed out in a recent Sunday NYT article, “When inflation-adjusted G.D.P. has come out of a decline and posted three or four quarters of gains, it has never immediately begun to fall again — at least not since quarterly numbers began to be issued in 1947.”
And that is what we have had — a year of improving GDP. Following the initial surge in data off of the lows, we have entered a slowing phase of the recovery.
The key factor regarding all of this slowing data is that it is suggestive of an economy that will continue to expand, albeit at a slower pace. None of this data is highly aberrational, and none of it is consistent with past double dip recessions.
He says the calls for double dip recession are coming from the same economists who missed the mess the first time around and are now calling for fiscal austerity measures like cuts in government jobs and spending.
Barry also says doing that right now at a time when the economy is STILL vulnerable could actually send it into recession again. The time for balanced budgets and fiscal prudence is during an economic expansion, not the post recession period where the economy is just coming out a downturn.
Unfortunately the deficit hawks are winning the argument on policy.
That's why the teacher bill in the Senate that would have provided billions to keep teachers from being laid off so far has not passed.
Once again, the idiots who caused the financial mess in the first place are creating more problems and hurting middle and working class people in the process.