Did we dodge the recession bullet?
TEXT OF STORY
KAI RYSSDAL: There’s another largely speculative story floating around out there. The one about whether or not the economy might manage to skate by without going into recession. It’s a classic economists’ story featuring lots of on-the-one-hand, on-the-other-hand developments. Today, for instance, an index of leading economic indicators rose when it had been expected to fall. But then again there’s a survey out today predicting weak growth for the rest of the year. We asked Marketplace’s Nancy Marshall Genzer to find out who’s right.
NANCY MARSHALL GENZER: Six of the Conference Board’s 10 indicators rose. Stocks went up, more houses were built. Time to party, right?
Oops, put that beer down. The indicators that fell? They’re pretty important. The number of hours worked fell sharply and consumer sentiment was down. Ataman Ozyildirim is an economist at the Conference Board.
Ataman Ozyildirim: There are still some clouds in the horizon. It may just be a temporary let up.
Or we may be headed back into an economic hurricane. The Conference Board only looks up to six months out. The National Association of Business Economists looks farther into the future. It says the outlook for economic growth is weak for this year and next. Northern Trust Economist Paul Kasriel says we’re in the eye of the storm.
PAUL KASRIEL: When we do start to see the blue skies, they really aren’t going to be that blue for some time. I think we’re going to see gray skies even after the worst of the hurricane is behind us.
Economist Brian Bethune of Global Insight says any glimmer of blue sky is due to temporary factors. The economic stimulus package, for one. And it expires at the end of this year.
BRIAN BETHUNE: If you combine that with the higher gasoline prices then that could, in fact, cause the economy to contract in the first quarter of 2009.
Bethune says it’s definitely not time to party. The consensus on our economic future is a big, old Let’s wait and see.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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