Wednesday, February 18, 2009

Did We Just Hit the Trough?

Note: in no way am I claiming definitively that the economy just troughed, or even that there is a high probability of last month being the trough.

Having said that though, there is better data coming in.

Recessions are always a mix of bad and good data with the former predominating (just as expansions are mostly good numbers with a few bad ones thrown in).

What is going to happen when the economy troughs though, is that the data is going to start getting better at a certain point, and after several months of improving data the NBER will declare that the trough occurred at that point in the past when things started getting brighter.

So, take a look at “Data Hints At Slowing of Decline” from the February 17 issue of The New York Times. (Also note that the title indicates a slowing of decline rather than a turning point, although the reporter is putting in an opinion there that a macroeconomist wouldn’t dare to.)

Manufacturing shrank at a slower rate in January from December, and new orders rose slightly …

… Retail sales crept up 1 percent in January …

Sales of existing homes jumped an unexpected 6.5 percent in December …

No comments:

Post a Comment

Post a Comment