From RGE Monitor:
In H2 2009, as the economy bottoms out from a record contraction (the worst in the last 60 years), adjustments, such as slower inventory destocking, will occur, while policy measures such as “cash for clunkers” will boost auto production and induce continued spending brought on by the stimulus. According to RGE Monitor, these factors will likely bring U.S. real GDP growth back to positive territory in Q3 2009. However, the NBER is not likely to call the end of the recession until at least late 2009 or early 2010. In addition to GDP growth, the NBER looks at four variables in making recession calls: real personal income less transfer payments, real manufacturing and wholesale-retail trade sales, industrial production and payroll employment. While all of these indicators might perform better in H2 than in H1 2009, they are likely to remain in contraction or register sub-par growth. With the labor market now a leading indicator for the recovery in private consumption and the wider economy, trends in payrolls will definitely influence the NBER’s call.
H2 2009 Pick-Up in GDP Growth a Temporary Phenomenon
From RGE Monitor:
In H2 2009, as the economy bottoms out from a record contraction (the worst in the last 60 years), adjustments, such as slower inventory destocking, will occur, while policy measures such as “cash for clunkers” will boost auto production and induce continued spending brought on by the stimulus. According to RGE Monitor, these factors will likely bring U.S. real GDP growth back to positive territory in Q3 2009. However, the NBER is not likely to call the end of the recession until at least late 2009 or early 2010. In addition to GDP growth, the NBER looks at four variables in making recession calls: real personal income less transfer payments, real manufacturing and wholesale-retail trade sales, industrial production and payroll employment. While all of these indicators might perform better in H2 than in H1 2009, they are likely to remain in contraction or register sub-par growth. With the labor market now a leading indicator for the recovery in private consumption and the wider economy, trends in payrolls will definitely influence the NBER’s call.