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Signs of the Recovery?

Spring is here, the sun is shining – and some days it feels like the dark days of the recession are over. A spate of headlines in the past few days indicated some are ready to call it a day on the recession:

Central Bankers See Turning Point Near – Wall Street Journal, May 12, 2009
Is the worst of the economic downturn over? – CNN.com, May 11, 2009
Recession ‘could be over by August’ says OECD as housing market perks up – The Daily Mail, May 12, 2009
Has the recession bottomed out? – BBC, May 12, 2009

But what are the economists saying? The bears, as usual, are still being bears. Everyone else is being erratic.

Bloomberg surveyed economists last week and came up with a bleak report today: Two more years until it’s over. The respondents predicted the jobless rate will get worse – growing to 9.6% in 2010 – before it gets better (falling back to 8.5% in 2011) and even if the economy expands to nearly 2% next year, as they’re predicting, it won’t be enough if the job market is still suffering. Economists involved: John Lonski, chief economist at Moody’s Capital Markets Group; Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd.; Bruce Kasman, chief economist at JPMorgan Chase & Co.
Verdict: Recession

In the Washington Post on Sunday, Jane Bryant Quinn asked, “Is the Great Recession over?”

“Not yet, but sooner than you think,” says economist Lakshman Achuthan, managing director of the Economic Cycle Research Institute in New York City.

The institute’s U.S. Long Leading and Weekly Leading indexes are up significantly from their December lows. In 16 of the past 17 downturns, this sequence of upturns has correctly forecast a recovery in about four months. (The exception: 1930, so there’s something in the record for pessimists, too.) Verdict: Recovery

Barry Knapp, strategist at Barclays Capital, wrote recently about a “sweet spot of a recovery” for the recession. But a Detroit native commented in response to an ABCNews.com article on Knapp’s report, “I don’t think these ‘financial experts’ have visited the Detroit area lately. I am one of the few lucky ones still employed by a large automotive supplier. If they think the recession is over, please all flock to the metro-Detroit area and buy one of the many, MANY homes which are for sale and try to get a decent job around here in the next 2 years……oh, you can’t, cuz they don’t exist.”
Verdict: Recovery (commenter: Recession)

NYU economist Nouriel Roubini, told CNN Money in a video interview that one of the key signs of a healthy economy, a balance of supply and demand, was still sick, with excess supply. But then, we didn’t really expect “Dr. Doom” to say anything good about the economy anyway.
Verdict: Recession

The shadow economist-in-chief, Paul Krugman, is also doubtful about a recovery any time soon. On his Big Picture blog, Barry Ritholtz, CEO of quant research firm Fusion IQ, noted remarks by Krugman at a forum today: that a rapid recovery was “extremely unlikely.”
Verdict: Recession

Last month, back when the weather wasn’t as nice,  Harvard history prof Niall Ferguson and New School senior fellow Jeff Madrick, speaking on a panel at Hunter College, sounded an even more dour note, calling these times a “depression.” Alrighty, then.
Verdict: Depression

But there are skeptics who disregard all this info as just more of the same. As our Twitter pal Lesley Gold pointed out today, the economists were among those who got us into this mess with inaccurate or absent predictions.

Perhaps a better and more relevant measure is how things are going on the ground. Right about now, are you feeling recession or recovery?

Tags: economy, jobless, layoffs, recession, recovery