Rockindeano wrote:The Sushi Hunter wrote:Rockindeano wrote:If she is the nominee, we get 4 more years of Obama, something I don't want to see.
Your not happy with Obama?
Fuck no I 'm not. Willing to be patient because he did inherit an impending train wreck, and I want to see if the Stimulus works. The recession is now over as Q3 showed growth and unemployment dropped. We'll see.
Ummm, no. The recession is not necessarily over -- not by a long-shot. The real question is whether the economy is on a
sustainable path. Nothing in the GDP release suggests that it is. Also, the National Bureau for Economic Research (NBER) is the group that dates recessions. They use five factors, not one. The five are: (1) real (inflation-adjusted) GDP, (2) real (inflation-adjusted) income, (3) employment, (4) industrial production, and (5) wholesale-retail sales. All five factors have to taken into account in determining whether a recession is technically over (or has begun).
On the first one statistic (real GDP, the one that you cite), the figures that you cite are
preliminary, and subject to extensive revision. The second, more complete estimate is released on November 24. Also, GDP includes federal government spending, which lately has been increasing off the charts. But increased government spending does not necessarily mean anything more than that the feds have opened the floodgates on spending. Secondly, of the estimated 3.50% increase in GDP, 1.66% of that comes from motor vehicle sales, i.e., the "cash for clunkers" program. In other words, a substantial portion of that GDP figure is non-sustainable. Furthermore, another 0.94% of the reported 3.50% increase comes from change in real private inventories -- restocking, in other words, from abysmally low levels.
In summary, therefore, 2.60% of the 3.50% reported increase in preliminary GDP figures from one-time incentive programs ("cash-for-clunkers") and massive inventory restocking. There is nothing in these figures yet that suggests a sustainable recovery.
On the second statistic (real income), the reported figures show a
decrease in current-dollar personal income (-0.50%), and a
decrease in disposable (after-tax) personal income (-0.70%). Summary: no evidence of a sustainable recovery here either.
On the third statistic (employment), the employment market is stuck in neutral. Continuing claims for unemployment exceeded expectations at 530,000. These are consistent with continued job losses of about 200,000 per month -- not a sustainable recovery. When you have more people losing jobs than getting them, you don’t have the pre-conditions for a sustainable recovery. The economy needs to move it up a notch with job growth or we are looking at a double dip. The numbers here are pointing to a structurally high unemployment rate (i.e., one that could linger around 9-11% for several years), not an improvement by any means.
On the fourth statistic, industrial production is stuck around 70.5% of capacity utilization. This is a depressionary level of industrial capacity. While there have been small upticks in recent months, these are hardly encouraging signs (and they simply fit the pattern of inventory restocking anyway).
On the fifth statistic, I'll wait until the likely poor sales numbers come rolling in for Christmas before making a judgment on those.
The bottom line is that, even if the NBER calls an "end" to the recession, it would be an end only in a narrow, technical sense. And the probability would still be high that the economy could fall back into a recession (even a deeper recession), given that the fundamentals of the economy are so shaky regardless.
If you see encouraging signals in these five statistics, you're a more optimistic fellow than I am.
