On this blog we have posited over the last several weeks that the US economy may already have entered a period of recession. There have been many economists taking this view recently. A reader wrote back stating that media is possibly overplaying this, we have not seen two consecutive quarters of economic growth declines and the media sensationalism may have the unintended consequence of affecting consumer behavior and thus indirectly pushing the economy in recession
It is important to note that there are many many respected and credible economists and business/government leaders who do not subscribe to the idea that the economy is or will enter into a recession any time soon
US Treasury Secretary Henry Paulson is one of the economic leaders who believe that there is no recession. He iterated this position at comments made ahead of the G7 meeting in Japan. Apparently the Bank of England also believes that there is no need to be overly aggressive as evidenced by only a quarter point rate cut this week. European Central Bank also appears to be more concerned with inflation risk rather than recession risk. There is a belief that the impact of the credit markets meltdown will be mostly localized to the housing sector, other sectors possibly slowing down but not to the point of reversing growth
I really really hope that these leaders are right and not in denial
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I don’t believe the media is overplaying the recession, even if the government doesn’t state that we are in a formal recession, I can tell you that consumers everywhere are feeling affects of a recession, even while Washington denies we are in a recession or heading towards a recession. For many out there, there are in a recession and have been for quite some time and are really looking for some relief.
Thanks Michelle! I imagine you would have first hand experience with how this is affecting consumers and businesses through your practice
i agree with you on this part really hope that these leaders are right and not in denial
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I’d be worried about inflation to. While many think rate cuts are what is going to “save” our economy, I don’t subscribe to that line of though.
Mommie
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The media keeps hyping the thought that we’re in, or headed for, a recession. I’m not so convinced yet though. Yes, certain sectors are down, like housing. However, Americans are still spending, spending, spending….In major cities, nice restaurants are still booked with long waits, fast food restaurants have lines, people are still driving long distances to work without car pooling or using public transportation, and theres always loads of people with bags full of junk in the shopping centers. In other words, I don’t see people cutting back on their spending habits…
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