Tags: recession | over | in | may

Recession Over, Everyone Back to Work

By Dan Weil   |   Wednesday, 06 May 2009 10:23 AM

Brian Wesbury and Robert Stein, economists for First Trust Advisors in Wheaton, Ill. can’t be accused of running with the crowd.

They think the recession is over now. As in this month, May.

In a Forbes magazine column, they argue first that the National Bureau of Economic Research chose the wrong date for the start of recession.

The NBER decreed that the current recession began in December 2007.

But Wesbury and Stein believe the downturn really started in September 2008. The economy actually grew at a 1 percent annual rate from December 2007 through August 2008, they point out.

“That doesn't look like a recession to us,” the duo write.

“Once the ‘real’ recession started … we consistently forecast it would be over by mid-2009, earlier than many (including the Federal Reserve) predicted.”

Now, a V-shaped, strong recovery is underway, they say.

“When the NBER eventually gets around to declaring the recession end date, we think it will be May 2009.”

Evidence of recovery includes:

  • A decline in new claims for unemployment insurance

  • First-quarter growth in consumer spending and a probable rise in the second quarter

  • A rebound in consumer confidence

  • An increased sales pace for new housing

    Unemployment is a lagging indicator, the two point out. So don’t expect that to fall soon.

    But, “in our view, there are no more shoes to drop,” they write.

    Not everyone agrees.

    "People like to talk about green shoots," economist Nouriel Roubini, known as Dr. Doom, tells Time magazine.

    "All I see is a lot of yellow weeds."

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    Brian Wesbury and Robert Stein, economists for First Trust Advisors in Wheaton, Ill. can’t be accused of running with the crowd.They think the recession is over now. As in this month, May.In a Forbes magazine column, they argue first that the National Bureau of Economic...
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