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Tony Wang

Tony Wang
Location
San Diego, California, USA
Birthday
September 05
Company
Bagheera Media
Bio
Practicing random acts of factually based thinking.

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OCTOBER 14, 2011 3:34PM

Double Dip Recession Seems To Be Off the Table

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Throughout the summer, the talk was of a double dip recession.  As usual, when everyone starts talking about something, it's likely that what they're talking about won't happen.

Take, for example, this article from the Atlantic from August 1.  It was called "10 Signs a Double-Dip Recession is Around the Corner."  Traders reacted, of course, and sold off stocks.  In August, the Dow was off by by 4.4 percent.  The S&P 500 and Nasdaq were down by 5.7 percent and 6.4 percent, respectively.  And September was another bad month for stocks, with the Dow shedding 5.9 percent, the S&P 500 falling by 7.0 percent, and the Nasdaq dropping by 6.4 percent.

Doom was predicted to be just around the corner.

As usual, the pundits were wrong.

On September 24, weekly unemployment claims dropped below the 400,000 level that economists consider to be the point where the economy is starting increase hiring.  They have since hovered around that figure, with this week's data coming in at 405,000.

Retail sales came in better than expected, with September's retail sales increasing by 1.1 percentAuto sales are back to the highest level since before the tsunami hit Japan, putting a big crimp in supplies needed to make cars.

And GDP growth for the second quarter was revised upwards from 1.0 to 1.3 percent.  While still slow, it's at a higher level than you'd expect if the country was headed towards another recession.

Put it all together, and it doesn't look like we'll see the double dip recession that all the pundits were predicting in the summer.  The more likely scenario is that we continue to see growth, although slow growth.

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