Social mobility in the USA

[mookiemookie]

Originally Posted by August

The Dems do seem quite eager to declare victory over the recession.

Because all the data supports that conclusion. You'd have to be blind or a partisan hack to argue with the fact that the gradual increases in industrial manufacturing, exports, autos, retail sales, durable goods all confirm the economy is getting better.

Remember - a recession ending is not the same as full recovery. It just means that things are getting better instead of worse.

[August]

Originally Posted by mookiemookie

Because all the data supports that conclusion. You'd have to be blind or a partisan hack to argue with the fact that the gradual increases in industrial manufacturing, exports, autos, retail sales, durable goods all confirm the economy is getting better.

Remember - a recession ending is not the same as full recovery. It just means that things are getting better instead of worse.

The point is you are jumping the gun to declare the recession over. What increases we've seen are minuscule and could easily be temporary.

*I hope that is not the case.* but to declare that we're on the road to recovery is at best premature and at worst putting lipstick on a pig.

[tater]

The definition is like recession in the first place. Consecutive quarters of growth or retraction.

The point is you are jumping the gun to declare the recession over.

The word is entirely dependant on measured levels of growth or contraction.
You cannot just decide you don't like the definition as it must be wrong because your favourite muppet isn't in office and some other muppet got the job instead.
Well to be fair you can just decide that the agreed definition used wordwide is wrong because you don't like it, but you must realise it just makes you look rather foolish when you decide to do that.

[mookiemookie]

Originally Posted by August

The point is you are jumping the gun to declare the recession over. What increases we've seen are minuscule and could easily be temporary.

*I hope that is not the case.* but to declare that we're on the road to recovery is at best premature and at worst putting lipstick on a pig.

You are correct in saying that it could very easily slip back into recession and to some extent it remains to be seen if the road to recovery is sustainable and long term, but based upon the available empirical data the country is indeed out of the recession (i.e. contraction) stage at this point in time.

And tater, there is no one single benchmark test of a recession or recovery. Instead, folks in my business look at a variety of factors and how they interplay and affect each other. The old saw about "two quarters of positive/negative GDP" oversimplifies things.

[tater]

Any less simple definition opens the economist link to criticism based on claiming we're leaving recession. It in effect becomes entirely subjective.

Using a simplistic definition then they could very well be correct that we're coming out of it. Regardless, the economist, like ALL journalism has an editorial slant, and that slant as calibrated by US politics is absolutely "left." It's also very European in sensibility from my reading ("the US is bad, m'kay").

[SteamWake]

http://money.cnn.com/2010/04/12/news...usiness_cycle/

[mookiemookie]

Originally Posted by SteamWake

http://money.cnn.com/2010/04/12/news...usiness_cycle/

From your own article:

While those and other developments have caused many economists to tentatively place the recession's end date sometime in June or July 2009, the economists at NBER decided they needed to wait for more definitive data before making an official determination.

(emphasis mine)

The NBER is notorious for taking a lengthy amount of time to call an official end to the recession. It took them over a year and half after the 2001 recession ended to call the trough of the cycle. And it took 21 months after the 1990-1991 recession ended for NBER to call that one over.

So the moral of the story is that just because the NBER hasn't said its over yet, doesn't mean it isn't over yet.

[August]

Originally Posted by SteamWake

http://money.cnn.com/2010/04/12/news...usiness_cycle/

Important part highlighted.

"Although most indicators have turned up, the committee decided that the determination of the trough date ... would be premature," the group said in a brief statement.
The committee said that many economic indicators are "quite preliminary" at this time and could be revised in the months ahead. The committee bases its decisions on "actual indicators" -- not forecasts -- about economic growth, the job market and other measures.

[mookiemookie]

Originally Posted by August

Important part highlighted.

It doesn't change the fact that the NBER uses a (very long) rear view mirror in calling recession beginning and end dates. There is a fundamental difference between saying something is over and saying when that something ended. That is the crux of the discussion. The majority of NBER committee members will tell you that the recession is over (Feldstein, Frankel) but what they will not do is commit to putting a date on it. Yet.

Regardless, the majority of economic data is showing an end to the recession. No one can ignore that. However, the recovery is another phase altogether. It may take years for a recovery to happen.

But since people seem to like charts, here's one:



This here's the Chicago Fed National Activity Index

The CFNAI is a weighted average of 85 existing monthly indicators(pdf) of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.