CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Saturday, April 10, 2010
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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9 Comments:
Interesting commentary Professor Mark...
I'm personally still a bit pessimistic though...
None the less looking at the BLS' Job Openings and Labor Turnover Survey and there is a noticeable uptick between 2008 and now...
Wow. Great communicators giving excellent commentary. Who won? Everyone watching and listening.
The expansion was inevitable, given the Fed's quantitative easing, TARP, and the massive fiscal spending. Yet, we're closer to the trough, in mid '09, than the peak, in Dec '07.
I suspect, much of the recovery is consumers and producers buying after postponing major purchases rather than new demand.
The question should be why is this rebound from the depths of the deep recession so weak?
The U.S. economy rebounded strongly from the last severe recession, in 1981-82, averaging 8.5% real growth for five consecutive quarters, in 1982-83.
The current expansion, which is already slow, is overstated by the 3% of GDP lost in imports, and consumption growth is at one-third the level compared to the 1981-82 recession.
1. >"I suspect, much of the recovery is consumers and producers buying after postponing major purchases rather than new demand."
I suspect that much of the apparent recovery is due to government spending., not consumer or producer spending. You are correct, there is no new demand.
2. >"The question should be why is this rebound from the depths of the deep recession so weak?
Because #1 above is not true. In my view, political uncertainties are still keeping consumers and producers.from making major commitments.
Government actions give the impression of economic growth, but it is a temporary phenomenon.
I'm not making any major long range plans right now, are you?
Ron, I agree, government has caused uncertainty or confusion. For example, there's a reason why "fat cat" bankers are more hunkered down than in prior recessions.
Government has been accelerating and braking growth simultaneously. There has been much effort to get nowhere. I guess, that's what happens when a bunch of lawyers micromanage an economy.
think back to to kudlow's 2007 goldilocks economic scenario. now it's a V shaped recovery (from the crash we weren't supposed to have).
sorry, another permabull. eventually he'll be right.
Scott J. Brown, Ph.D.
Senior Vice President, Chief Economist
Raymond James & Associates
April 5, 2010
The economy is growing again. Recent data reports have been consistent with a gradual recovery. While the advance estimate of 1Q10 GDP growth won’t be released until later this month, it appears likely that real GDP growth may have been close to a 4% annual rate. As with 4Q09 GDP growth, much of that is expected to be inventories. Underlying demand still appears relatively lackluster at this point in the recovery, but it is increasing.
A number of headwinds lie ahead in the second half of this year. The fiscal stimulus will start to ramp down. The Bush tax cuts will sunset at the end of the year. State and local government budgets remain under considerable strain. Residential housing problems will linger and commercial real estate is expected to be a problem. However, these forces are likely to only dampen growth, not send us into a double dip.
Already the economy is looking overheated. Gasoline prices, gold. I expect a shortage of good qualified employees is here now. We should not stimulate the economy in order to employ so many. Reality is that we are still importing labor from other countries.
Anyone know what Gov't Tax receipts from private expenditures are looking like?
What does Household Income look like compared to Household Debt? ...How does this compared to other recessions?
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