No Recession Still; UPDATE: Maybe Per Capita
If you define a recession as negative economic growth for two straight quarters then the U.S. has yet to see one this business cycle. The revised numbers from the Commerce Department (PDF) show GDP growth was better than first reports:
The revised reading of first-quarter gross domestic product helped ease some concerns about recession, which is defined by two straight quarters of decreasing GDP. The Commerce Department said the economy grew at an annual rate of 0.9 percent — above the department’s earlier estimate of 0.6 percent — and the fourth-quarter increase of 0.6 percent.
This isn’t a “stand up and cheer” number. 0.9% is anemic growth. Digging further into the numbers we see purchases related to housing and real estate cratering but exports improved. That’s due to the weakened dollar. On the corporate side profits “increased $5.2 billion in the first quarter, in contrast to a decrease of $52.9 billion in the fourth quarter.” Specifically for the beleaguered financial sector profits only decreased by $3 billion in the first quarter which was less than the $74.4 billion in losses in the fourth quarter of 2007.
I’m not beholden to calling the situation we’re in a “recession” or not. These certainly aren’t the best of economic times, but they’re also not the worst. The popped housing bubble had lead to a credit crunch (mostly tentative banks). Then when you add skyrocketing oil and gas prices you get hesitant consumers along with firms unwilling to take risks. We’re still in a wait-and-see mode at how long much of the housing mess works itself out.
“Economic Growth Is Revised Higher”
UPDATE: On a per capita basis (see “Chained dollars“) dipped in 4Q of 2007 and went slightly up in 1Q of 2008. So you could argue it’s a recession. Like I said above the r-word doesn’t bother me too much. I’d like to see the economy doing better. This isn’t great growth. No doubt about that, but we’re no where near “historic lows” Henry Dubb claims in the comments.
For more read Barry Ritholtz’s post from April.
So, let me get this right, if we have a continual rising immigration problem - legal and illegal - then we are not in a recession.
The only thing GDP measures is population growth. When population growth is held constant we have been in recession for quite some time.
What we really need to look at is per capita consumption. Per capita consumption is at historic lows. Most of our consumption is made up from personal and governmental debt.
But have your fantasy and believe that population growth is a reasonable measure for economic growth.