An article this morning titled ‘Recession eases; GDP dip smaller than expected’ reports U.S. GDP fell 1% in Q2, and that the U.S. economy has now contracted for a record four straight quarters for the first time on record dating to 1947.  This has led to predictions such as “The recession looks to have largely bottomed in the spring. Businesses have made most of the adjustments they needed to make, and that will set up the economy to resume growing in the summer” (Joel Naroff, president of Naroff Economic Advisors).  The article goes on to say  “Even if the recession ends later this year, the job market will remain weak. Companies are expected to keep cutting payroll through the rest of this year, but analysts say monthly job losses likely will continue to narrow”, and “unemployment — now at a 26-year high of 9.5 percent — will keep rising. The Fed says it will top 10 percent at the end of this year. Businesses will be unlikely to boost hiring until they’re certain the recovery has staying power”.  Note the Fed thought only 3 months ago U.S. unemployment would top out at 8.5% – watch for the July numbers which ought to begin to surface next week.

See my post earlier this week on ‘the meaning of economic recovery’, and consider my ongoing comments related to what I see it the importance of focusing on absolute numbers, not percentages.  Even if U.S. GDP returns to positive territory in the next quarter or Q4, unless U.S. job losses strongly reverse (which I don’t see happening) in my view ‘so what’.  All comments on recovery based on ‘a slowing of bad results’ to me are similar to the common result you get when you ask people “How’s it going”.  How many people have you asked that question of to be told “no good”, “terrible”, ‘badly”, etc.  I’ll bet you not many – that certainly has been my life-experience with asking that question.

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