Are we heading into a new recession or a double dip? That seems to be a question on people’s minds as the economic activity softens.
Here is my simple question: How many quarters of growth — anemic, or not — do we need before the next recession is officially a new recession, and not a double dip?
Consider — the only real double dip on record was the 7 month recession from January to July 1980, followed by a new recession a mere 12 months later, lasting from July 1981 to November 1982. That is according to the NBER cycle dating committee. The “double dip” had a mere 12 months between the two.
The present cycle saw the last NBER dated recession ending June 2009 — that was 27 months ago, assuming the recession started today. Since that recession, we have seen an increase in employment, manufacturing output, and retail sales. It has since plateaued at very modest level. But it is not accurate to claim that there has been no recovery — it is more accurate to say it has been a weak recovery.
This hardly seems like a double dip — more like two distinct cycles.
January 1980(I) July 1980 (III)July 1981(III) November 1982 (IV)
December 2007 (IV) – June 2009 (II)
September 2011 ?
What do you think — new recession or double dip?
Rising Fears of Recession
NYT, September 7, 2011