People “are walking away from their homes in droves not because they lost their jobs but because home prices are falling,” Leamer said.
Many prominent economists and institutions, including Wall Street powerhouse Goldman Sachs and former Treasury Secretary Lawrence H. Summers, have already declared the economy to be in recession. That is commonly defined as two consecutive quarters of decline in gross domestic product.
UCLA predicts that GDP will dip by 0.4% in the second quarter of this year, but then rebound. Anderson expects GDP to be growing at 2.5% by the end of this year.
In staking out the contrarian position, Leamer noted that UCLA bucked other forecasters in 2001 by correctly predicting that year’s recession.
“We got it right, and we stood alone back then,” he said. In jest, he added later that he had “submitted my resignation letter, in the event I am wrong.”
I hope he saved his resignation letter as a word processing file. He can trot it back out and won’t have to do anything except change the date.
Actually, the indications are that he is probably closer to correct than the inflamatory headlines of the NYTimes and CNN.
Retail sales were up (slightly) last month, in spite of all the gloom and doom.
and unemployment is still at 5%, correct? During the roaring 90’s it was never lower than 5%, was it?
This recession is about the permanent increase in energy costs (up 45% YTD) and the permanent increase in food costs (up 30% YTD), tight credit, and the threat of real inflation. job creation & unemployment are in good shape, but just see how far your 2-4% annual pay increase is going to take you this year!
A recession is when your neighbor loses his/her job.
A depression is when you lose yours.
YBIC,
Phil Snyder
Retail sales were up because: 1. The population of the USA grew; and 2. We had something close to 5 million more tourists visit the US than the year before. The weak dollar means higher retail sales.
The middle and working class folks have been losing ground for over a decade, the present crisis is finally tipping some over the edge, despite their best efforts.