NY Times: More Arrows Seen Pointing to a Recession

[marmar]

More Arrows Seen Pointing to a Recession

By PETER S. GOODMAN
Published: August 1, 2008


The American economy expanded more slowly than expected from April to June, the government reported Thursday, while numbers for the last three months of 2007 were revised downward to show a contraction — the first official slide backward since the last recession in 2001.

Economists construed the tepid growth in the second quarter, combined with a surge in claims for unemployment benefits, as a clear indication that the economy remains mired in the weeds of a downturn. Many said the data increased the likelihood that a recession began late last year.

The next major piece of data comes Friday, when the government is to release its monthly snapshot of the job market. Analysts expect the report to show a loss of 75,000 jobs, signifying the seventh straight month of declines.

“We already knew the economy was weak, and now you have both a negative growth number coupled with job losses,” said Dean Baker, a director of the liberal Center for Economic and Policy Research. “There’s a lot of real bad times to come.”

President Bush zeroed in on the positive growth in the second quarter — a 1.9 percent annual rate of expansion, compared with an anticipated 2.3 percent rate. That follows growth of 0.9 percent in the first quarter. He claimed success for the $100 billion in tax rebates sent out by the government this year in a bid to spur spending, along with $52 billion in tax cuts for businesses.

“We got some positive news today,” the president said in West Virginia, addressing a coal industry trade association. “It’s not as good as we’d like it to be but I want to remind you a few months ago, there were predictions, and — that the economy would shrink this quarter, not grow.”

But the snapshot of disappointing economic growth released by the Bureau of Economic Analysis on Thursday morning provided no comfort to Wall Street, where a broad sell-off commenced. By the end of business, the Dow Jones industrial average was down 206 points to close at 11,378, a drop of nearly 2 percent.

The rout may have been explained in part by significant changes the government made to historical data on the profitability of American businesses. According to the revised numbers, corporate profits earned in the United States by American companies rose much more swiftly than previously recorded from 2005 through 2007, making the recent decline appear much steeper. ......(more)

The complete piece is at: http://www.nytimes.com/2008/08/01/business/01econ.html?_r=1&oref=slogin

[FreakinDJ]

1. negative growth number coupled with job losses,”

negative growth numbers coupled with job losses - McCain economic policies

[tinrobot]

2. Aren't we already in a recession?

[marmar]

4. Yep, but it's news to the Times.

n/t

[Vincardog]

5. We have been for the last 7 years

[AlCzervik]

3. thanks nyt, i had no idea before i read that piece.

[Vincardog]

6. Kitten thinks of nothing other than playing with it until it dies, all day. NOT MURDER