Please vote in this poll using the sidebar.
NBER will declare the current recession to have ended sometime in 2009.
- Likely. (35%, 40 Votes)
- Unlikely. (65%, 75 Votes)
Total Voters: 115
This poll will be active and displayed on the sidebar through 06.20.2009.
Lake Hills Landlord » Jun 14, 2009 at 2:05 pm
I suspect that NBER will find the current depression started sometime in 2009. June perhaps? Look at California tax receipts for a real-time clue as to the state of the economy.
Scotsman » Jun 14, 2009 at 2:22 pm
Trick question.
As NBER defines the question, a positive turn up in the tracked data would be seen as the end. But stepping back to view the greater picture, it’s clear there’s much more economic pain to come. I don’t think their methodology does a very good job of capturing that. And the press will just report the claim that a recession has “ended.”
On the other hand, much seems to be failing faster than expected, so they may not get the temporary small bump up they need to call the end of a cycle. But I voted “yes.”
Scotsman » Jun 14, 2009 at 2:49 pm
RE: Lake Hills Landlord @ 1 –
If one uses the statistical analysis provided by shawdow stats, we’re already in a depression:
http://www.debtorsprisonblog.org/journal/2009/5/27/shadow-government-statistics.html
Softwarengineer » Jun 14, 2009 at 3:02 pm
AND OBAMA WILL USE HIS MAGIC WAND AND CREATE GOOD JOBS FOR ALL INSTANTLY THIS YEAR
If you believe that, I’ve got a bridge I can sell ya. I and most economists predict more and more degradation of job opportunities through 2010. Just because the job degradation slows a small bit per month means as much as termites eating your house a bit slower now; even VP Biden agrees with me.
Without about 1 yr of significant job creation bigger than degradation will give us a slim hope of recovery; assuming the commercial RE loans don’t destroy the banks worse than the subprimes ever did, before that happens. And believe me, that’s a “BIG IF”.
jon » Jun 14, 2009 at 5:09 pm
I haven’t finished reading this yet, but apparently one of the people involved in the NBER determination has found a strong link in previous recessions with peak new unemployment data claims. According to that pattern, the turning point has occured already.
http://economistsview.typepad.com/economistsview/2009/05/can-unemployment-claims-predict-the-end-of-the-american-recession.html
Total unemployment will continue to rise as long as new claims exceed new hires. When those two have balanced is when overall unemployment will start to fall.
deejayoh » Jun 14, 2009 at 5:57 pm
RE: jon @ 5 – Makes sense, unemployment has been a lagging indicator in every turndown back to the 40’s. Though I suspect the conclusion will be nay-sayed by the uber-bears on the site, and others might quite predictably make the point that nothing is predictable…
Of course the author of the post is a Duck, which makes it suspect no matter what!
David Losh » Jun 14, 2009 at 7:14 pm
RE: jon @ 5 –
The census is the largest mobilization of man power outside of war time. The census has already started hiring. That will continue through 2010.
This recession will drag on. The debt alone will take years or decades to pay down. That will be a first step. Next we need real production. We will need tangible results to solve some large global issues.
Jonness » Jun 14, 2009 at 7:30 pm
RE: deejayoh @ 6 –
Peak unemployment lags the economic bottom, and peak foreclosures lag peak unemployment. Although technically we could start seeing GDP slowly climbing at any time, house prices will continue to see pressure and could stunt the $12.5 trillion green shoots.
EconE » Jun 14, 2009 at 8:58 pm
Losh touched on something that concerns me about unemployment numbers etc.
How many people found new work at much lower wages?
How many ex-(Insert high $ occupation here) are now counted as “employed” just by working as a census worker for a limited time?
When those part time census worker jobs are finished, will those workers be counted as newly unemployed again or are UE benefits exhausted at that point where they become part of U6 and not U3?
I’m not contesting anything said so far…just curious.
WRT whatever the NBER says…don’t care…we’ve redefined inflation and unemployment over the years…they’ll define things however they see fit as far as I am concerned.
b » Jun 14, 2009 at 8:59 pm
RE: jon @ 5 – I do not think, personally, that this recession will follow that pattern. It works fine predictively for the standard business cycle recessions (e.g. excess supply overhangs which need to be worked off) we have seen in the most recent half decade. However, it does not work for the Depression, which was the last deflation/credit event lead environment. So I do not think that standard indicators will necessarily reflect properly in our current recession, as it was led by credit contraction and still is being exacerbated by it. Looking at other deflationary recessions is a better indicator than looking at past business cycle recessions (e.g. Japan).
S-Crow » Jun 14, 2009 at 9:27 pm
RE: deejayoh @ 6 –
LOL. Good stuff.
Jonness » Jun 14, 2009 at 10:34 pm
Here are some interesting numbers, make of them what you will.
………..Tax ………..Federal…….GNP…….Unemp.
Year…..Receipts….Spending….Growth…..Rate
—————————————————————
1929………?……………….?……………..?……..3.2% Depression begins
1930……..4.2%………….3.4%……..- 9.4%……..8.7
1931…….3.7………………4.3………..- 8.5…….15.9
1932…….2.9………………7.0………..-13.4…….23.6
1933…….3.5………………8.1………..- 2.1……..24.9 New Deal begins
1934…….4.9………………10.8………+ 7.7……..21.7
1935…….5.3………………9.3………..+ 8.1……..20.1
1936…….5.1………………10.6………+14.1…….16.9
1937…….6.2………………8.7………..+ 5.0……..14.3 recession begins, May
1938…….7.7………………7.8…………- 4.5……..19.0 recession ends, June
1939…….7.2………………10.4……….+ 7.9……..17.2
mukoh » Jun 14, 2009 at 10:42 pm
RE: EconE @ 9 – EconE, also take a look at financial sector jobs lost in the last 12 months and amount of available positions, the supply of workers is endless, demand is scarce.
Losh with his medication swings has been talking about census numbers for months. I think the total number of census workers is nothing compared to the losses in other sectors. Census workers are mainly part time bartenders getting extra money.
Jeremy » Jun 15, 2009 at 12:17 am
RE: jon @ 5 – It’s actually a bit more dire than that. For the unemployment rate to stop rising new hires have to not only match new claims but EXCEED them to account for population growth. So the net number has to be significantly positive for the labor market to truly stabilize.
EconE » Jun 15, 2009 at 12:34 am
RE: mukoh @ 13 –
I think Dave has been using the Census workers to illustrate the point that the jobs that are being created are not only government jobs, but temporary jobs…what happens when they are gone?
I suspect that the bartenders have some competition for that “extra-pay” job this time around.
David Losh » Jun 15, 2009 at 8:06 am
The census will bring new statistics to the beige book. It will define the statistics for the number of housing units that have been created. We throw around numbers like there are fifteen million empty housing units in the United States and the census will confirm that, or not.
Obama is promising jobs. What will those jobs look like?
My concern is that Clinton used the Census for his welfare to work program. Is this Obama pledge another political trick?
After the census public works dollars will be distributed based on the need of a district. The pork will grow fat for some and leaner for other Congressional districts.
The debate we’ve been having, and which I feel extremely passionate about, is government jobs. I think our tax dollars would be better spent on a Universal Health Care system, alternate energy sources, and education, all of which can create government jobs. Other people disagree and think our American Corporations should continue to provide social welfare. Either way we all pay.
Racket » Jun 15, 2009 at 9:26 am
“Census workers are mainly part time bartenders getting extra money. ”
Funny, most of the people I have met lately that are doing it are real estate agents.
deejayoh » Jun 15, 2009 at 9:57 am
RE: Jonness @ 8 – I’m just agreeing with Jon’s point that it is highly likely we are near/at the bottom on GDP declines. And when I read the same conclusion from the typically bearish Mish, I am pretty comfortable that it is not that wild of a possibility.
but I agree with you that housing still hasn’t bottomed. Perhaps in some markets, but not as a whole. And we are going to see slow growth at best coming out of this.
deejayoh » Jun 15, 2009 at 10:10 am
By Jeremy @ 14:
I think you missed the author’s point, which was that there is a statistical link between the peak in claims and the end of the recession, not the peak in the unemployment rate. so it is essentially the first derivative of the unemployment rate, not the rate itself that is the signal.
The Kid » Jun 15, 2009 at 5:35 pm
As far as re-employing formerly high paid people in lower paid jobs, I’ve noticed, personally, that alot of the layoffs are essentially unemployable outside their fields. In a nutshell, the lower paid people that work with me and work under me ($12-$14hr) require a certain amount of humility,physical strength, and stamina. Most of the lower paid jobs do, We are still looking for people, even today, and having a hard time finding them. Why? Because a laid off 52 year old software engineer is typically unable, unwilling (or both) to work for 10 hours a day on their feet doing physical labor. Unemployed RE agents are getting turned down for jobs as waitstaff on the spot because they lack the basic qualifications to do the job.
No, most of those former high $ position holders are just running on credit cards and limited savings, not getting re-employed in lower wage jobs.
The Kid