The End of the Recession – A Follow-Up
In December, I wrote a post (which through a mixup went up in early January) about the end of the recession, stating this:
Specifically, I expect it before the second half of next year. I’m actually hedging my bets here – my gut tells me that it will come before the second quarter of next year.
That was at a time when just about nobody was saying we’d be out until 2010. (I note I was also a bit early to call the start of the recession – in March of 2008 I had a few posts talking about how the recession that had started was different from past recessions.)
In comments to the end-of-the-recession post, I pointed out
The end of the recession doesn’t mean things are all rosy. It does mean the trough, though.
After all, the last time around, we weren’t out of the woods job-wise until about two years after the recession ended.
I stand by a few other things noted in the post as well – that the actions of the past administration and the current administration have made things worse. This could and should have been a mild garden recession if the banks had been allowed to fail and then been cleaned up a la Resolution Trust Corporation. (The Big 3 wouldhave still been in trouble, but the bulk of that problem would have occurred at a different time, reducing the severity of the whole mess.)
Fast forward a bit, and over at Econbrowser, James Hamilton has had a few posts (the most recent one here) looking at the possibility that the trough is here based largely on the declines we’ve observed in initial jobless claims. If that whole analysis is right, I was wrong about it happening in the first quarter, but not by much – April or May.
And if you pay attention to the commodities markets, especially oil and natural gas, it seems a lot of players are not just predicting a bottom right about now, but that we’re going to come zooming back. Frankly, I think they’re overly optimistic by quite a bit.
Things could, of course, still get worse. A lot worse. This administration has proven it will do some of the same bone-headed things its predecessor did. The Big 3 are throwing a bit of a monkey wrench into things. And I don’t even want to think about the effect of the whole Brooke Shields – Kiefer Sutherland rift. (Actually, I really don’t. I don’t know why I even know about it. Repeated attempts to scrub that information from my brain have failed.)
So… where are we now? Are we about at the bottom? What is the trajectory the economy is going to follow through the end of the year? Thoughts+