{"id":591,"date":"2011-06-02T07:09:47","date_gmt":"2011-06-02T11:09:47","guid":{"rendered":"http:\/\/www.billdawers.com\/?p=591"},"modified":"2011-06-02T07:13:48","modified_gmt":"2011-06-02T11:13:48","slug":"serious-signs-of-a-double-dip-recession-beginning","status":"publish","type":"post","link":"http:\/\/www.billdawers.com\/2011\/06\/02\/serious-signs-of-a-double-dip-recession-beginning\/","title":{"rendered":"Serious signs of a double-dip recession beginning"},"content":{"rendered":"<div class=\"e26b170012445c56d240655bdd03f7bf\" data-index=\"1\" style=\"float: left; margin: 10px 10px 10px 0;\">\n<script type=\"text\/javascript\"><!--\r\ngoogle_ad_client = \"ca-pub-5595881567027133\";\r\n\/* Medium Rectangle *\/\r\ngoogle_ad_slot = \"8584504377\";\r\ngoogle_ad_width = 300;\r\ngoogle_ad_height = 250;\r\n\/\/-->\r\n<\/script>\r\n<script type=\"text\/javascript\"\r\nsrc=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\r\n<\/script>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"269\" data-permalink=\"http:\/\/www.billdawers.com\/2011\/03\/06\/savannah-stopover-preview-7-sanders-bohlke\/window-17\/\" data-orig-file=\"https:\/\/i0.wp.com\/www.billdawers.com\/wp-content\/uploads\/2011\/03\/window6-e1299440530555.jpg?fit=67%2C77\" data-orig-size=\"67,77\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;4.8&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;NIKON D40&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;1244646881&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;38&quot;,&quot;iso&quot;:&quot;200&quot;,&quot;shutter_speed&quot;:&quot;0.033333333333333&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"window\" data-image-description=\"\" data-image-caption=\"\" data-medium-file=\"https:\/\/i0.wp.com\/www.billdawers.com\/wp-content\/uploads\/2011\/03\/window6-e1299440530555.jpg?fit=67%2C77\" data-large-file=\"https:\/\/i0.wp.com\/www.billdawers.com\/wp-content\/uploads\/2011\/03\/window6-e1299440530555.jpg?fit=67%2C77\" tabindex=\"0\" role=\"button\" src=\"https:\/\/i0.wp.com\/www.billdawers.com\/wp-content\/uploads\/2011\/03\/window6-e1299440530555.jpg?resize=67%2C77\" alt=\"\" title=\"window\" width=\"67\" height=\"77\" class=\"alignleft size-full wp-image-269\" data-recalc-dims=\"1\" \/>The National Bureau of Economic Research&#8217;s Business Cycle Dating Committee takes its time. It wasn&#8217;t until December 2008 that the NBER declared firmly the the recent recession <a href=\"http:\/\/www.nber.org\/cycles\/dec2008.pdf\">began<\/a> in December 2007. And it wasn&#8217;t until September 2010 that the NBER determined officially that the recession <a href=\"http:\/\/www.nber.org\/cycles\/sept2010.html\">ended<\/a> in June 2009.<\/p>\n<p>Of course, it was obviously long before December 2008 that the nation&#8217;s economy had declined precipitously. Pinning the end of the recession was a bit more slippery. With employment still so low and so many measures far below their pre-recession peaks, I&#8217;m not sure that the NBER called the end date appropriately. <\/p>\n<p>So don&#8217;t look for any official NBER release anytime soon about our current and rather sudden economic slowdown &#8212; at a time when we were already moving pretty slowly. <\/p>\n<p>First quarter GDP grew at an annualized rate of 1.8%, which obviously indicates expansion. But that&#8217;s a mighty slow pace given the slack in the economy and it&#8217;s clear that the odds of a serious stall &#8212; or another drop &#8212; are higher than we&#8217;d like them to be.<\/p>\n<p>Manufacturing ISM Report on Business for May <a href=\"http:\/\/www.ism.ws\/ISMReport\/MfgROB.cfm?navItemNumber=12942\">registered 53.5<\/a>, indicating a 22nd month of expansion (any number above 50 indicates expansion). But this is the first time the index has been below 60 in 2011 and it&#8217;s the lowest reading of the last 12 months.<\/p>\n<p>ADP&#8217;s <a href=\"http:\/\/www.adpemploymentreport.com\/pdf\/FINAL_Report_May_11.pdf\">May report<\/a> on private nonfarm employment showed an anemic increase of 38,000 jobs in the country. That&#8217;s about 100,000 less than needed to keep up with population growth. The service sector did better than others, but the news was bad for manufacturing and construction:<\/p>\n<blockquote><p>May\u00e2\u20ac\u2122s ADP Report estimates employment in the service-providing sector rose by 48,000, marking 17 consecutive months of employment gains while employment in the goods-producing sector fell 10,000 following six months of increases. Manufacturing employment fell 9,000 in May following seven consecutive monthly gains.<\/p>\n<p>Employment among large businesses, defined as those with 500 or more workers, decreased by 19,000, while employment among medium-size businesses, defined as those with between 50 and 499 workers, increased by 30,000. Employment for small businesses, defined as those with fewer than 50 workers, rose 27,000 in May.*<\/p>\n<p>Employment in the construction industry dropped 8,000 in May, completely reversing April\u00e2\u20ac\u2122s increase. The total decrease in construction employment since its peak in January 2007 is 2,124,000.<\/p><\/blockquote>\n<p>We&#8217;re still about 7 million jobs below the 2007 peak. As noted <a href=\"http:\/\/www.calculatedriskblog.com\/2011\/05\/case-shiller-national-home-prices-hit.html\">here<\/a> by Calculated Risk, GDP has rebounded to pre-recession levels but personal income adjusted for inflation is still below the 2007 level.<\/p>\n<p>So we&#8217;ve seen a recovery that is far from complete, and now there are additional signs &#8212; many small ones &#8212; of bad news. Auto sales have sagged of late, and national home prices <a href=\"http:\/\/www.calculatedriskblog.com\/2011\/05\/case-shiller-national-home-prices-hit.html\">are falling<\/a>. Pending home sales also fell according to the most recent data. Initial weekly claims for unemployment insurance moved lower for a few months but are back up above 400,000. Trucking <a href=\"http:\/\/www.calculatedriskblog.com\/2011\/05\/ata-trucking-index-decreased-07-in.html\">decreased<\/a> in April. So did the <a href=\"http:\/\/www.calculatedriskblog.com\/2011\/05\/aia-architecture-billings-index.html\">Architecture Billings Index<\/a>.  Europe remains on <a href=\"http:\/\/blogs.reuters.com\/felix-salmon\/2011\/06\/01\/how-europes-central-banks-are-staving-off-catastrophe\/?dlvrit=60132\">the verge of crisis<\/a>.<\/p>\n<p>David Leonhardt <a href=\"http:\/\/www.nytimes.com\/2011\/05\/27\/business\/economy\/27leonhardt.html\">wrote about some of this dreary data<\/a> last week in the NYT. He wonders &#8212; and so do I &#8212; why there isn&#8217;t more substantive public discussion among policymakers of this slowdown. The Fed seems unlikely to launch a third round of quantitative easing (QE3), even though that&#8217;s very likely needed &#8212; and i suspect needed right now. With Americans convinced that cutting federal spending is a matter of the greatest urgency &#8212; far greater than bringing down the unemployment rate &#8212; we&#8217;re unlikely to see political leaders make decisions in the best interest of the economy.<\/p>\n<p>So it looks like our national policy &#8212; as determined by the voters as much as by the policymakers &#8212; is to embrace austerity, even though we know that will lead to public sector layoffs and exacerbate unemployment. And part two of that policy: cross our fingers. We&#8217;ll just have to hope that improving supply chain issues related to the Japanese earthquake help boost auto sales and manufacturing. We&#8217;ll have to hope that there is some pent-up demand for homes as prices continue to fall. We&#8217;ll have to hope that small businesses see growing demand. We&#8217;ll have to hope that energy costs continue some of the recent declines.<\/p>\n<p>Policymakers did a terrible job of understanding the housing bubble as it was inflating and of seeing the risks that led to the financial crisis. But I think they&#8217;ve done a great job in keeping the economy afloat since then; a major depression was a real threat, whatever that would have looked like in the 21st century. But now we appear to be at another crossroads. The danger is that a year from now the NBER will be talking about May or June 2011 as peaks.<\/p>\n<!--CusAds0-->\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>The National Bureau of Economic Research&#8217;s Business Cycle Dating Committee takes its time. It wasn&#8217;t until December 2008 that the NBER declared firmly the the recent recession began in December 2007. And it wasn&#8217;t until September 2010 that the NBER&hellip;<\/p>\n<p class=\"more-link-p\"><a class=\"more-link\" href=\"http:\/\/www.billdawers.com\/2011\/06\/02\/serious-signs-of-a-double-dip-recession-beginning\/\">Read more &rarr;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4],"tags":[31,9],"class_list":["post-591","post","type-post","status-publish","format-standard","hentry","category-economics","tag-employment","tag-home-prices"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1gN9R-9x","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/posts\/591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/comments?post=591"}],"version-history":[{"count":0,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/posts\/591\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/media?parent=591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/categories?post=591"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.billdawers.com\/wp-json\/wp\/v2\/tags?post=591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}