CEA Chief: No Recession

Another reputation, soon to be in tatters:

The White House’s top economist said he’s confident the U.S. economy hasn’t dipped into recession, and expressed optimism that stimulus checks could bolster growth in the current quarter, earlier than expected.

"The data are pretty clear that we are not in a recession," Council of Economic Advisers Chairman Edward Lazear told a meeting of editors and reporters from the Wall Street Journal and Dow Jones Newswires.

But the official declaration of a recession would likely be made after the fact by the National Bureau of Economic Research. And Mr. Lazear said just two areas of the economy are showing the type of deterioration that the NBER would consider recession range: retail sales and manufacturing. NBER says a recession is marked by a significant decline in economic activity, lasting more than a few months and seen in real gross domestic product, real income, employment, industrial production and wholesale-retail sales.

I’ll see if I can get the full piece posted . . .

>

Source:
Lazear Sees No Recession for U.S. Economy
HENRY J. PULIZZI and JOHN D. MCKINNON
WSJ May 7, 2008 8:08 p.m.
http://online.wsj.com/article/SB121019473822674751.html

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What's been said:

Discussions found on the web:
  1. Finbob commented on May 7

    Just like the White House came up with their own data for when the last recession started, you’re almost guaranteed the numbers will not show a recession until Bush leaves office.

  2. Paul Jones commented on May 7

    The “Weekend at Bernie’s” economy…

    They are just trying to drag the dead carcass of the economy just beyond the November finish line so they can blame the “official” recession/depression on Obama.

    Let’s call it like it is.

  3. Winston Munn commented on May 7

    “….Edward Lazear told a meeting of editors and reporters from the Wall Street Journal and Dow Jones Newswires.”

    Captain Renault: “Realizing the importance of the case, my men are rounding up twice the usual number of suspects.” – Casablanca

  4. Jay Miller commented on May 7

    Wealthy See Recession as Optimism Flags

    Nearly 80% of affluent Americans believe a recession has already hit the U.S., and optimism about the U.S. is at a record low among the well-to-do, according to the Annual Survey of Affluence and Wealth in America by American Express Publishing Corp. and Harrison Group.

    “Results demonstrate that America’s ‘leadership cadre’ and successful households believe strongly that we are in a recession. Moreover, confidence in themselves and America’s prospects have fallen six or seven percentage points since December and over 30 points in the past three years,” said Jim Taylor, vice chairman of Harrison Group, a market research and strategy firm in Waterbury, Conn.

    Four in five polled in the survey, which examined the opinions of 638 households representing the wealthiest 10% of the U.S., said this perceived recession resulted from the “free and easy” availability of debt, with Wall Street and Washington equally to blame.

    Survey respondents, who have an average discretionary income of $342,000, aren’t highly sensitive to recent economic shocks, but the poll found that they are still the same “emotional recession.” As a result they are cutting debt, saving more and scrutinizing spending.

    Optimism in America has waned in 2008, with only 24% upbeat in April, down from 30% in December.

    The affluent are more optimistic about their own prospects, but still less so than in the past. In April, 62% of respondents were upbeat about their own households, down from 70% in December and 78% in 2006.

    The largest worries in the poll concerned the country’s leadership, with 66% of the 638 respondents citing this issue. Other widespread worries included the collapse of the dollar, at 61%, and the war in the Middle East, at 57%.

    Six in 10 respondents believe there can be no rebound without a new president. John McCain leads the current field of candidates among the affluent with 37% support, followed Barack Obama at 20% and Hillary Clinton at 15%.

  5. Winston Munn commented on May 7

    “And Mr. Lazear said just two areas of the economy are showing the type of deterioration that the NBER would consider recession range: retail sales and manufacturing.”

    Captain Renault: “I am making out the report now. We haven’t quite decided yet whether he committed suicide or died trying to escape.” – Casablanca, 1942

  6. Mich(^IXIC1881) commented on May 7

    http://www.ft.com/cms/s/0/805fdd18-1bd0-11dd-9e58-0000779fd2ac.html

    Emerging markets will face grave problems in controlling inflation and money supply because of the expansionary economic policies of industrialised countries seeking to prevent gridlock in their financial markets, the head of the United Nations Development Programme warned yesterday.

    “This may cause us a lot of headaches in the next two or three years,” said Kemal Dervis, the UNDP administrator and former economy minister of Turkey, who was the architect of that country’s successful economic stabilisation programme. “We are seeing excessively expansionary economic policies, just as we did when the dot.com bubble burst.”

  7. Cherry commented on May 7

    If the dollar doesn’t start going down, it will be more than a recession. Bernanke may have to use the last of his 200bps very soon.

  8. sinic commented on May 7

    Well, look! These people have to put on this “all is well, or almost so” show. Just imagine what would happen if they came out and said what they really believed. The consumer confidence, the markets, and everything else would immediately tank, making things a lot worse. The people in leadership positions have to lie during crises!

  9. Marcus Aurelius commented on May 7

    An opinion cannot, by nature, be a lie – so I won’t say this dude is lying. He’s doing something worse. He’s propagandizing. He’s a prostitute, and should never again be taken seriously by his professional peers.

    Same goes for Yun.

  10. Winston Munn commented on May 7

    Cherry,

    I don’t see that happening. The continued shortfalls from the Treasury are mounting – there is another $40B CMB either this week or early next. As the credit/revenue/jobs spiral continues downward, the increased treasury needs will create oversupply that will drive bond prices lower.

    At some point you have to pick your poison – do you want the Treasury to be able to borrow at reasonable rates or do you want to support stock prices?

    Yes, it will get ugly before it is over.

  11. Cherry commented on May 8

    WM, absolutely. Little surprise 1965-74, 75-79, 80-83 looks very similiar to 96-05, 06-8 probably 08-???????????. The only problem is the debt is much higher and worse now.

    First we had the rapid debt inflationary period, then the stagflationary(sorta a inbetween period of inflation and deflation), then the debt deflation as everything fell apart and reset.

  12. wunsacon commented on May 8

    Those Casablanca quotes kick ass, Winston.

  13. John commented on May 8

    My favorite part is when those guys talk about “real” GDP or “real” wages, which is arrived at using the imaginary inflation (ex inflation) numbers.

  14. Passet Ahn commented on May 8

    But since the Feds haven’t cut any spending programs, and Congress keeps appropriating more taxes, even if we must borrow from the Chinese until our children’s first payday,
    as far as Feds are concerned, “Recession?
    What recession?” They’re still getting their paychecks and D.OT’s, bonuses and pensions.
    Full pensions even, COLA’s for life! Things
    have never been better for the “Uber Half”!
    Let’s Socialism.gov our way out of this one!
    We’ll send taxes to Mars and the Asteroids!
    Fill the galaxy with Möbius loops of USD’s!
    Then we can all march in Happy Face parades,
    singing ‘Put On A Happy Face’ in bassn’drum.

  15. daniel commented on May 8

    How stupid are we ?

    Will we look at the Bush admidistration as anything but a disaster for this country !!

  16. dave54 commented on May 8

    REAGANOMICS:
    Falling interest rates
    Low commodity prices
    Low taxes….deregulation
    Rising debts & deficits
    Falling workers wages
    Low unemployment rate
    Higher real estate prices
    Steady economic growth
    Massive stock buy-backs
    Ever rising equity prices
    High pop art prices
    Blame Liberals

    ALZHIEMERS:
    Runaway oil prices
    Rising commodity prices
    Rising unemploment rates
    Rising interest rates
    Dangerously high level of consumer debt
    High & rising government deficits
    Higher taxes…regulation (on CO2)
    Falling home prices
    Lower dollar (higher exports)
    Slower (global?) economic growth
    Flat to lower stock prices
    Art market bubble burst?
    Blame Conservatives

  17. Telly Savalas commented on May 8

    In just the past 24 hours, the USD:SWF ratio has reversed it’s spread, and closing again, after a nerve-wracking two weeks, during which the USD strengthened against the SWF.

    The DJIA seems to suggest they are already aware of it, or more likely, the people driving this have already got the fix in the markets on the short sell, now it’s time to take a dump.

    Your little two week US pump-and-dump, brought to you courtesy of Paulson and Soros. Everyone who bought large caps will get a large haircut tomorrow, or at latest, Monday.

    Remain calm. Everything is under Fed control. This is an orderly liquidation of your 401k’s. Those wishing a redemption, please refer to the Bible in your motel room down the block. % )

  18. Francois commented on May 8

    “Well, look! These people have to put on this “all is well, or almost so” show. Just imagine what would happen if they came out and said what they really believed. The consumer confidence, the markets, and everything else would immediately tank, making things a lot worse. The people in leadership positions have to lie during crises!”

    I disagree. Everything else will tank anyway. So, there is no point in adding irritating bullshit. instead, this president that is months away from leaving could tell it like it is and help the country face up to the facts, and act accordingly.

    But that would require a President that lives in the real world and has enough true moral fortitude to be honest with the people.

    I don’t recall that happening during the last 8 years.

  19. grumpyoldvet commented on May 8

    Heard an interview with Tom Keane (?) and Brian Westbury yeaterday on Bloomberg Radio….Westbury as always says that the economy is fine. unemployment is low and inflation while a concern is in check….he blames the entire mood of the consumer on the media and that this is why the consumer is gloomy…..as always some just create their own reality

  20. Uncle Jeffy commented on May 8

    And in the spirit of Winston’s earlier quotes from Casablanca, let’s consider how the unemployment (B/D adjustment), inflation (headline v core, hedonic adjustments), and GDP (due to the misreported inflation rate) numbers have been fudged to make things look better than they are:

    Captain Renault: “I’m shocked – shocked! – to find gambling going on in here!”

  21. Alfred commented on May 8

    I don’t think Lazear needs anything else but his association with the Bush/Cheney regime to have his reputation tarnished.

  22. Adam commented on May 8

    So are we supposed to believe a white house economist who says “The data are pretty clear that we are not in a recession,” Or would you rather believe Martin Feldstein who is on the NBER and is actually responsible for dating recessions who says

    “Monthly data since January indicate that economic activity and GDP have been declining since the start of this year.

    Private sector payroll employment … has fallen five months in a row… Industrial production was lower in March than in December and January. Real personal income net of taxes and transfers is also lower… Real retail sales have fallen since the start of the year. Private housing starts are down 13 per cent in just the two months since January”

    You be the judge, I know who I’m believing. But I also bet they will not officially date it until AFTER the election.

  23. me commented on May 8

    “.he blames the entire mood of the consumer on the media and that this is why the consumer is gloomy…..as always some just create their own reality”

    I think that is the right wing talking points. Herman Cain said this morning everything is great and “people are gullible” for believing the media. Now, do you need the media the tell you that you just put $100 bucks in the gas tank?

  24. michael schumacher commented on May 8

    unfortunately the public will do nothing until the gas pumps get shut off. Then they will revolt as the right to pay for $6/per gallon becomes more the attitude rather than the actual cost of the gas.

    Not that the prices are too high…that doesn’t get anyone to protest……shut it off and wait.

    That is the only way anything will be done about it.

    Access, no matter what the price, is the key.

    Ciao
    MS

  25. DL commented on May 8

    Ed Lazear’s reputation will not be in tatters. No one expects him to be honest.

    Remember “Baghdad Bob” (the Iraqi information minister)…? He’s a celebrity.

  26. winslow commented on May 8

    Do you think Mr Lazear ever considered that the measument methods are not accurate? Just come to my neighborhood and see rows of foreclosed homes. I’ve never seen this in my lifetime. We need a government that is based on finding truth and offering solutions. I don’t know if the democrats can do it, but the republicans certianly can not.

Read this next.

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