Comments are free but facts are sacred.
–Charles Prestwich Scott
This was my response to a reddit post that the linker titled “More Economists Agree We Are In A Recession – Well duhhh!.” I wanted to save it for reference:
A recession is (by definition) two quarters of negative economic growth. We haven’t seen results from the first quarter yet… and what is more; January and February results show slow BUT NOT negative growth (like 0.2%.) This means that even IF we have enough negative growth in March to overcome Jan & Feb (something that is likely to happen) we still have-to-have another FULL QUARTER of negative growth before we will know if we were in a recession.
We may very well have a recession; but there is a moderate chance we will not. Why? Because the slow economy has put downward pressure on the dollar… causing exports to actually INCREASE against foreign currency. If this continues for another quarter, there is a moderate opportunity that net exports will keep our economy in the positive. Just look at Caterpillar. There US sales are AWFUL! But they are expected to have 20% GROWTH for the year because of foreign sales. The dollar has lost what? Like 15% over the last year? That makes Caterpillar 15% cheaper overseas that it was last year.
Most economists are looking at the hard numbers and coming to the the most likely conclusion. But don’t blow off the possibility of slowdown VS recession with a simple “WELL DUHHH!” A recession may very well happen (in which case we would be in the beginnings of it now) but it is certainly not an absolute.
Remember that economists are amazingly good at predicting recessions. They have successfully predicted 20 of the last 7 recessions! 😉