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Evidence now clearly shows, the recession began under the previous administration, just as his opponent had declared before the elections. Not, by the way, that the President has a lot of say in these matters... I just print this for the Bush bashers.clark
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It's official: Recession is over
Economists: End came in '01 despite continued job losses
By Robert Gavin, Globe Staff, 7/18/2003
The US economy emerged from recession nearly two years ago, even though it has been losing jobs ever since, according to the Cambridge-based group that officially dates US business cycles.
The National Bureau of Economic Research, the recognized authority on when recessions begin and end, announced yesterday that the recession that began in March 2001 ended eight months later in November of that year.
[NOTE: The accompanying graph clearly shows the slide beginning in March 2000!]
The group's Business Cycle Dating Committee based its conclusion largely on data that show that gross domestic product, which measures the nation's output of goods and services, has been growing steadily since the end of 2001 and is now greater than it was at the peak of the 1990s expansion.
The eight-month duration makes the 2001 recession among the briefest since World War II, but it has nonetheless been followed by one of the weakest recoveries, with the economy rebounding at about half the rate of previous upturns. Since the recession technically ended, the nation has lost nearly 1 million jobs.
Noting the weakness in labor markets, the bureau, in a statement, was quick to add: ''In determining that a trough occurred in November 2001, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and recovery began in that month.''
That, of course, is little comfort to the 9.3 million who were still jobless in June, or the hundreds of thousands who have lost jobs during the recovery.
''If the economy isn't growing enough to give people work, what's the difference?'' said Mark D. Trachtenberg, 43, of Brighton, who was laid off from the state Department of Revenue in September and has been looking for work ever since. ''I have a hard time believing that it's ended.''
Trachtenberg's views underscore the differing perspectives on what constitutes a recession. While the public focuses on the job market, economists typically track the ups and downs of the economy according to output, with GDP as the broadest measure. Most economists agree that the economy, as measured by GDP, stopped contracting near the end of 2001 and has been recovering, albeit weakly and unevenly, for more than a year. As a rule of thumb, many analysts define a recession as two consecutive quarters of declining GDP.
While employment has traditionally followed increases in output, the time between a production turnaround and job growth has expanded in the last two recessions. During the so-called ''jobless recovery'' that followed the 1990-91 downturn, the economy went 13 months before employment growth resumed, according to Sung Won Sohn, chief economist at Wells Fargo Banks in Minneapolis. This recovery -- now at 19 months and counting -- has gone jobless even longer.
Bureau economists, who consider several factors -- including GDP, employment, income, and sales in dating a recession -- said the opposite trajectories of output and jobs gave them pause in calling the end of the 2001 recession. Ultimately, the group said in its statement, it gave more weight to GDP, which has grown 4 percent since bottoming in the third quarter of 2001 and is 3.3 percent above its peak in the 1990s expansion.
Those economists said that productivity gains appear responsible for the growing divergence between output and jobs. Reaping the benefits of investments in technology and other improvements during the 1990s, and under increasing pressure from global competitors, businesses are getting more out of their current work force instead of hiring employees. The 2001 recession was remarkable in that unlike past contractions, when productivity typically flattens or falls, productivity grew at an annual rate of 3 percent, according to Mark Zandi, chief economist at Economy.com, a West Chester, Pa., consulting firm.
In order for the economy to add jobs, output must grow faster than productivity, Zandi added. But since the recovery began, productivity has been growing at a 3.6 percent rate, about a percentage point faster than output.
Sohn, the Wells Fargo economist, said such economic changes, driven by technology and globalization, raise questions of whether output is indeed the best measure of the economy's health. Increasingly, he added, businesses, particularly manufacturers, are sending jobs overseas, rather than recalling laid-off workers.
''Can you have a recovery without jobs?'' he said. ''I would argue that employment has to stabilize first before you can even think about a recovery.''
Many economists, however, believe labor markets are beginning to stabilize, and that the economy, souped-up by historically low interest rates and a federal tax cut, will, in the second half of the year, grow fast enough to generate jobs, with a broad-based recovery taking hold next year.
Robert Gavin can be reached at rgavin@globe.com.
This story ran on page C1 of the Boston Globe on 7/18/2003.
© Copyright 2003 Globe Newspaper Company.
Follow Ups:
whata spin
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The actual report can be found at the link below. The article Clark sites is fully spun to the Bush re-election agenda (the economy is not our problem).I did some searching on the net and this group seems to be without political or social agenda, used mostly by academics and other economists.
Note that the report is very clear that the authors only comment on historical data that is at least a year old. The following quote is at the end of the document and states:
"Q : Does the committee believe that a new recession has begun?
A: The committee does not forecast or comment on current economic activity."
So, we could very well be in a new recession, and that might firmly rest in Bushes care. But when will we know, according to this committee, in about a year and a half, and that's after the election.
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unemployment and stock market. Where are they today as opposed to three years ago?
Ok. Back to the hose.
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How long ago was it that the DJIA was under 8000? Unemployment is a lagging indicator, and usually the last to turn around. I'm not saying the economy is great, but it never was as bad as the pessimistic Chicken Littles have been claiming (for obvious agenda driven purposes).
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The DOW graph for the year-to-date shows that the markets are up and down, but that the highs are progressively higher and the lows are progessively higher.
When you have stocks like YAHOO and EXCITE exceeding 100% YTD, technology must be recovering FAST.
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Apparently, you haven't been listening to the earnings announcements. Intel, and all the other hardware manufacturers are saying there is still no sign of a recovery. There's a lot of hope. Companies like Yahoo, selling at a P/S ratio of 16:1, show a little earnings, and they skyrocket. Technology is not recovering fast, but it might be recovering some, which is good enough. I sold a lot of stocks in the last few weeks, but bought back a little yesterday and this morning. Still expecting a down day or two in the next week or so, and may go lower, but you are right that prices don't seem to want to fall much, and I think we get a big rally into late August, early September. End of the year could be bad.
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I love the statistics. You can literally pinpoint the beginning of the depression to 12:00 p.m., March 2nd when Paul Allen dumped his first billion dollars worth of Microsoft stock. The man singlehandedly caused the tech bubble to burst.
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The tech stocks were already a bubble that was about to burst. Paul Allen had nothing to do with it. Janet El Reno was solely responcible for providing the pin that burst the bubble with her attack on Mircrosoft. Paul Allen was smart enough to know that it was time to get out.
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z
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Please Elaborate. If I understand correctly:So the market was actually not overvalued in March 2000? It was Paul Allen who scared other investors and who subsequently sold, and it was falling stock prices that hurt the economy? This is a total non sequitur and reverses cause and effect. How did Paul Allen cause the poor economy?
IMO, the market was vastly overvalued. There was massive overinvestment in unprofitable enterprises facilitated by cheap credit from the fed and speculative excess. The market eventually realized this and corrected, and the overinvestment had (still has) to be purged before the economy can truly rebound.
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q
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Sorry, couldn't resist. It's Friday.
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the big daddys of the republican party are so happy with how shrub has prolonged the downturn in the economy. It allowed them to trim staff, and keep those still employed scared to lose their jobs. Employees who are scared will work harder for less. They are less likely to complain or move to another job. And now we see production going up but no new hiring. The perfect recovery for big business.
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You are partly mistaken. This is the perfect recovery (but I don't think you can call it that YET) only for bankers with the Fed's easy-money policy (note the great earnings of the financial sector lately)-that policy erodes the buying power of the American populace. This is basically stealing from the savers in society and enriching the bankers and those who are overleveraged and live beyond their means.However, many businesses will continue to have problems due to their debt levels. The easy credit policy of the Fed only exacerbates this problem. It's like the kiosks on college campuses that offer low interest rates on credit cards--kids eat that up, lured by easy money, and then suffer under the load of that debt for years to come.
Businesses do this too. What should happen is that these businesses should fail due to their irresponsibility and their more responsible competitors should survive. Instead, the government is doing the politically expedient thing of easing monetery policy in order to keep those businesses afloat. What this does is greatly extend the recession and prevent true recovery. As noted earlier, it also secretly taxes the wealth of society by debasing the value of individual savings and wealth. This is also why Bush's tax cut in the face of hemmoraging budget deficits is asinine. Bush is simply giving with one hand and taking away with the other.
But tax cuts are seen and inflation is often not seen (especially when using the government's definition of inflation), hence the apparent popularity of the Bush economic plan with many people.
What Bush should have done was, immediately after getting elected, come clean regarding the excesses of the prior years and let the economy falter hard and fast...then we could be on our way to recovery. Instead, he, like so many politicians before him, thought he could fake it by keeping the status quo and depending on the Fed to ease monetary policy in a magnitude unprecedented in almost half a century.
the mismanagement of borrowed money is a true problem for smaller businesses. I am speaking in general about the big long standing mega corporations that are the engine of our economy. They are collectively most efficient at a certain production/staffing level. The overheated economy put them in a uncomfortable position of having to greatly step up production or lose their market to others. When they did this, production went up but efficiency was reduced and net costs of doing business went up. Employees had the ability to move around and improve their work situation. It was a employee's market. Having this downturn allowed companies to get back to a higher efficiency, cut bene's and still retain the good employee. This is a case of what is good for the business in not for the employee.
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Hate to tell you there is more millionaire Dems in the house and senate then are Republicans.
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millionaires are a dime a dozen. I am speaking of the big business folks. The old money types that run mega corporations.
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Your really naive if you think Dem politicians are not into big business as republicans are
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Bob, I am not talking about politicians. They are nothing but pawns. I am taking about the people who back them, tell them what to vote for. Look at the big donators for your favorite candidate and you will now who owns them IMO.
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Clinton had more millionaires in his cabinet than *anyone else* had.
Thats a bunch of crap. Lets have your source on this.
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The article of course states the precise opposite.
Bureau of Labor Statistics data for November 2001 versus June 2003:
BLS Household Survey
(used to calculate monthly unemployment rate)Total Labor Force:
144,296,000 November 2001
147,096,000 June 2003
- Increase of 2,800,000 peopleNumber of People Employed:
136,218,000 November 2001
137,738,000 June 2003
- Increase of 1,520,000 peopleAnalysis:
The labor force increased by 2.8 million people
but the number of people employed increased by
only 1.5 million people. Not much of an economic
recovery.
.
.
.BLS Payroll Survey
(used to calculate monthly increase or decrease in employment)Number of People Employed:
130,900,000 November 2001
129,962,000 June 2003
- Decrease of 938,000 peopleAnalysis: The payroll survey reflects fewer people
employed since November 2001. Not much of an economic
recovery.
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Recession: An act of receding or withdraw; A PERIOD OF REDUCED TRADE OR BUSINESS; A procession at the close of a service.The fact that unemployment is at a tewnty year high, also long term unemployment (six months or longer) is three times as high. To me this is what really matters. I'll cut Bush some slack when the ECONOMY is better, his tax cuts just don't seem to be working, until I don't think so!
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That's because the Democrats made him backload them. Which they did for the very purpose of making the gullible say, "They just don't seem to be working."Were the cuts to have taken effect sooner, rather than eight years down the pike, you'd see results now. As it stands, instant gratification is out of the question.
With his second taxcut they actually accelerated his first. The economy still sucks!
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♪ moderate Mart £ ♫ ☺ Planar Asylum
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You should seriously consider writing about subjects with which you are familiar. This ain't one of them.
other presidents and other generations." These are another set of meaningless words in George W's State of the Union address. In the NY Times Editoril, Paul Krugman take a closer look at the Bush administration's handling of our economy, tax cuts and mounting budget defecits.Pusl Krugman concludes, "But Mr. Bush shows no inclination to deal with the budget deficit. On the contrary, his administration continues to fudge the numbers and push for ever more tax cuts. Eventually, markets will notice. And tarnished credibility, along with a much-increased debt, is a problem that Mr. Bush will pass along to other Congresses, other presidents and other generations."
A must read!
Priya
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I hope people read it. Krugman is constantly on target, but unfortunately most people will say "how did this happen".And as we all know Neo-Cons love this stuff, now they can really go after Social programs.
you, quite simply, are a moron.
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Sticks and stones, tinman, sticks and stones. Why not offer some reasonably thoughtout, cogent arguments about why someone who is not rich should not support the current economic policies. It's always easier to insult than educate.
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