Most Economists Say Recession Has Arrived as Outlook Darkens
By PHIL IZZO
March 13, 2008
The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month.
"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.
The Commerce Department said Thursday that retail sales tumbled 0.6% in February; sales excluding volatile auto and parts decreased 0.2%. The decline reflected a sharp slowdown in consumer spending, the primary driver of U.S. economic growth, as Americans grapple with high gasoline prices and the credit crunch, as well as drops in home values and other asset prices.
The survey, conducted March 7 through March 11, marked a precipitous shift to the negative from the previous survey conducted five weeks earlier. For example, the economists now expect nonfarm payrolls to grow by an average of only 9,000 jobs a month for the next 12 months -- down from an expected 48,500 in the previous survey. Twenty economists now expect payrolls to shrink outright. And the average forecast for the unemployment rate was raised to 5.5% by December from 4.8% in the previous survey.
Much of the gloom stemmed from last Friday's employment report, which showed a loss of 63,000 jobs in February, the second consecutive monthly decline. "My recession call comes from the employment data," said Stephen Stanley of RBS Greenwich Capital. "It struck me as a recessionary number."
Twenty-nine of 55 respondents said they expect the economy to contract in the current quarter and 25 expect it to do so in the second. The average of all the forecasts is for meager growth -- just 0.1% at an annual rate in the current quarter and 0.4% in the second.
I'm starting to hear about unemployment, stores not doing well...
After church this morning, I was talking to the husband of a friend. He's been out of work since August, and he says that employers in his field are looking for two or three people for the price of one, i.e. listing two or three sets of skills, each of which normally constitutes a $60,000 position, but wanting ONE $60,000 a year person who has ALL those skills.
This recession is going to be long, severe and resistant to recovery.
The reason I am saying that is the US economy has changed for the worse in the past ten years.The usual recession starts with contraction in demand followed by reduction in manufacturing, depletion of existing inventories that sets the stage for the next business cycle.
Because we no longer have a domestic manufacturing base to start with, a manufacturing led recovery is not in the cards.
The service industry,led by banking,insurance and other financial manipulations is in a deep hole and cannot support a recovery now.
I am waiting to see how the geniuses on Wall Street handle this one.
May be a new war in the Middle East may be just what the doctor ordered.
Or, we turn into Argentina and end up improvising citizen-led economic reforms
I remember one case in which the workers took over a shuttered factory and started operating it as a cooperative.
That's actually the best-case scenario.
What the argentinians had going for them is that the citizens had lost
all confidence in the elite and were able to take matters into their own hands.In this country we have a scared citizenry that still believes the BS being dished out to them by the Republican and Democratic Elite.Only a complete loss of faith in the current institutional powers will produce meaningful change.
It's been a fucking roller coaster on wall street
but the general trend is down. Up 400 two days ago, down 300 yesterday, up 200 today, but still down a thousand in the last six months.
What I really worry about here is the pensions of the 50 and over crowd -- will their pensions turn to dust as the value of stocks tank and the value of the dollar tanks?
As one economist put it, it doesn't matter how many billions of dollars you make, or are worth, if the dollar is worthless; and American corporations can't seem to figure this out.
My thinking is that since the bank is broke....
the US is WAY over its head in debt, etc. and has already been spending OUR money we agreed for them to lay aside for our retirements and medicaid, etc.
There will be NO Social Security or Medicaid or any government programs for anyone. It will be each for his/her own.. period.