Is the recession over?

I’ve been reading a lot of snippets that suggest that the answer to that question may be “yes”.

The OECD, which measures “leading indicators,” suggests improvement is on the way:

Some of the world’s leading economies showed tangible improvement in May … They suggested many major economies — including the U.S., the euro zone and China — could end their declines later this year. Overall, the OECD lead indicator rose by 0.8 point to 94, the sharpest rise this year, but it was still down 7.3 points from May 2008. The indicators are designed to indicate turning points in economic activity about six months in advance, and the calcuations are based on a wide variety of data.

This article suggests that “an increase in exports bodes well for growth”:

Tentative signs of life in global trade are emerging, buoying growth forecasts in the U.S. and China, two of the world’s most important economies. U.S. exports grew in May, while imports fell, helping to narrow the trade deficit to its lowest level in nearly nine years. The report prompted economists to revise up their estimates of second-quarter gross domestic product. Some even suggested the economy might have grown slightly in the second quarter. “It’s a very good sign for GDP,” says Paul Ashworth, senior U.S. economist for Capital Economics in Toronto. “The economy didn’t shrink by much in the second quarter, and there’s an outside chance it recorded a gain.” Forecasting firm Macroeconomic Advisers increased its second-quarter GDP forecast from minus 1.6% to plus 0.2% on the news. New figures from China offered more support for the prospect that the massive drop in global trade is abating. Exports in June fell 21.4% from a year earlier, a smaller drop than May’s 26% decline, China’s state-run Xinhua News Agency reported Friday, citing official data.

That’s not huge, but it’s more in the right direction.

Still, I think everyone acknowledges that there are drags on the economy. The WSJ’s David Wessel suggests the recovery will be a painful (i.e., “jobless” one):

All signs point to a recovery so painful that many Americans may not realize when it finally arrives. There are signs the recession may end in coming months, but the U.S. economy’s recovery is likely to be so painfully slow that many won’t feel the difference. First, the good news. Auto sales and housing starts have fallen so low that they are unlikely to fall further, hence the talk of “stabilization” in those big, beleaguered industries. The mountain of unsold goods in factories, warehouses and stores, though still large, is shrinking. That eventually will lead manufacturers to stop reducing production and laying off workers. U.S. exports perked up in May. Credit markets are beginning to heal. Big companies are selling bonds. Even banks are selling new shares of stock. “Right now, we’re like a patient whose condition has stabilized and whose fever is just starting to come down,” Janet Yellen, president of the Federal Reserve Bank of San Francisco, said recently.

But the job market remains awful. In December 2008, forecasters surveyed by The Wall Street Journal predicted the jobless rate would hit what then seemed a very high 8.1% at the end of 2009. Surveyed again this past week, forecasters now anticipate year-end unemployment of 10%. That suggests 775,000 more Americans will join the ranks of the jobless in the next six months.

On balance, though, I think that the signs are very hopeful that my own job search is going to be a good one.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s