Double Dipping – US Back in Recession
August 31, 2011 · Posted in General Economics
Sings, signs, everywhere a sign. The evidence is now in that even by official standards the US has slipped back into recession. NBER is usually 6 months to a year late when it comes to calling recessions, so don’t hold your breath for their announcement anytime soon.
Doug Short writes in Will the “Real” GDP Please Stand Up?
[This chart] adjusts nominal GDP with the BLS (Bureau of Labor Statistics) Consumer Price Index for Urban Consumers (CPI-U, or as I prefer, just CPI):
… two quarters in the red, that’s a recession right there!
Futhermore, Wells Fargo reports that 12 states are in contraction, one is already likely to be in recession:
A report from Wells Fargo says Alabama’s economy has likely fallen into a recession, but two economic experts in Alabama have a different outlook.
The report from the San Francisco-based bank said Alabama was one of 12 states experiencing an economic contraction in July and “likely slipped into a recession.”
The report, written by senior economist Mark Vitner and economist Michael A Brown, said more states “are likely to fall into negative territory within the next six months” because of a persistent decline in manufacturing jobs.
Consumer confidence has plummeted to the lowest level since April 2009, in its biggest drop since October 2008:
Confidence among U.S. consumers plunged to the lowest level in more than two years as Americans’ outlooks for employment and incomes soured.
The Conference Board’s index slumped to 44.5, the weakest since April 2009, from a revised 59.2 reading in July, figures from the New York-based research group showed today. It was the biggest point drop since October 2008. A separate report showed home prices declined for a ninth month.
A few more quarters and NBER will likely back-date this fresh new recession to Q2 or Q3 of 2011.
Some more I wrote about the inevitability of a double dip recession: