Google Searches On Double Dip Recession Shoot Up

hen81 · Jun 27, 2011

People are worried and a double-dip recession is back on the minds of Web users. Google searches for double dip recession have shot up in the past two weeks.

http://blogs.wsj.com/economics/2011/06/17/what-google-can-tell-us-about-a-double-dip/?mod=WSJBlog

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waltky · Aug 5, 2011

Double-dip recession risk still with us...

Odds of a double-dip recession are still high
August 5, 2011: Even after the unemployment rate fell in July, economists say the risks of a double-dip recession are still high.

Cue the collective sigh of relief! A government report showed the job market fared better than expected in July. After rising for three straight months, the unemployment rate fell to 9.1% in July, beating economists' forecasts. Could our fears of a double-dip recession possibly be over? Not so fast. "July's employment report will go some way to reducing fears that the economy is slipping into another recession," Paul Dales, senior U.S. economist with Capital Economics, acknowledged in a note to clients. But he was quick to follow it up with these words of caution.

"But it highlights that the labor market has hardly recovered at all from the recession and that the economy is not growing fast enough to reduce significantly the unemployment rate," he said. Economists often say the economy needs consistent growth of 150,000 jobs each month, before the unemployment rate comes down. In the case of this July, only 117,000 jobs were created. The unemployment rate did come down -- to 9.1% from 9.2% -- but it was due to other not-so-encouraging reasons.

Rather -- points out economist Nouriel Roubini via Twitter -- it was because nearly 200,000 people were no longer counted in the unemployment calculation. They left the labor force -- either to retire, go to school or just because they gave up on their job search altogether. Known for predicting the 2008 financial crisis, Roubini also told Bloomberg TV Friday morning, that he still puts high odds on a double dip even after the jobs report came in better than expected. "I think it's a pretty lousy report," Roubini said. "We're at a stall speed and probably there's more than 50% probability of a recession in the next 12 months."

Evidence has been mounting for over a month now, showing the recovery has hit a speedbump and is slowing. Last week, the government revised down its GDP numbers, showing the economy grew a measly 0.4% in the first quarter and only 1.3% in the second. Consumer spending has barely picked up and the manufacturing sector practically stood still in July. Add to the mix, steep government spending cutbacks, and the unlikelihood of any substantial help from the Federal Reserve, and the experts are wary of where the U.S. is headed.

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waltky · Aug 7, 2011

To be or not to be...

Is the economy headed for a double-dip recession?
8 Aug.`11 - Some economists think the nation may be on the brink of a double-dip recession.

The economic tea leaves are difficult to read, economists say. For every sign pointing to a slowdown, another indicates a pickup. Recent economic reports have shown weakness in everything from manufacturing to consumer spending. The government recently revised its estimate of gross domestic product growth for the first quarter down to a meager annual rate of 0.4%. In the second quarter, the GDP growth rate was just 1.3%. Other indicators, such as corporate earnings, are at their strongest levels in years.

Thursday's 513-point plunge by the Dow Jones industrial average, its largest decline since late 2008, sparked concerns that the economy is heading off a cliff, since stocks are often seen as an indicator of future growth.Signs of economic weakness, the game of chicken with the U.S. debt ceiling that played out in Washington, D.C., and the spreading debt crisis in Europe have unnerved investors. Standard & Poor's downgrading of the U.S.'s credit rating, announced late Friday, may heighten worries when markets open Monday.

But Friday's employment report, which showed that the economy added a better-than-expected 117,000 jobs in July, helped ease concerns that another recession is around the corner. In response, the Dow posted a mild gain. In keeping with the mixed signals investors are getting, other indexes, such as the Nasdaq composite , declined. Tuesday, the Federal Reserve's policy committee will meet in Washington to determine how to respond to the latest twists and turns in the economy. Few expect the central bank to announce new plans to stimulate growth, but investors will keep a keen eye out for any hints that such plans are under consideration.

There's little question that the odds that the economy is heading toward a contraction are on the rise. John Lonski, chief economist at Moody's Investors Service in New York, put the odds of a recession at 40%, up from just 20% a month ago. His reason: the steep decline in the stock market, which can hurt consumer spending. In the recovery from the 18-month recession that ended in June 2009, rising stock prices have helped make consumers feel better off, even as many saw the prices of their homes decline. Now, home prices remain in a ditch and stocks are taking a beating. "What the U.S. can ill-afford is the decline in equity prices in view of how home prices have continued to fall," says Lonski. "It will reduce household wealth."

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waltky · Aug 16, 2011

Is what Warren Buffett said on Charlie Rose last night...

Economists: Second US Recession, If It Hits, Could Hit Hard
August 15, 2011 - Some economists are worried that the United States is poised for another recession. They warn that a so-called "double-dip," if it comes, could be more painful for average Americans than the 2007-2008 recession. Jobs, incomes, output and industrial production are all weaker now than they were then. One sector that has been hit especially hard is housing.

Mark Hudson is a real estate agent in Washington, D.C., one of the areas that has been least affected by the housing and construction bust. He peruses the day’s list of homes for sale. “We are down about 40 percent from June 2005 to June 2011 in home sales. That affects every potential area of the economy everywhere and we are, frankly, being close to Washington, in better shape then a lot of the areas of the country," he said. One of the homes Hudson is currently trying to sell is in a historic district in a suburb of Washington.

He says he’ll sell the house for much less than he would have several years ago. And that reduced housing prices have a real impact on peoples’ personal wealth. “If they had sold it a few years ago they would have cleared 'X,' now they are going to clear $100,000 to $150,000 less. That is money they could use in retirement or for buying a new house or for putting their kids in college, so it absolutely affects their personal wealth,” Hudson said. Robust home sales and construction can help drive an economic recovery. But economist Karen Dynan says that probably won’t happen this time around.

“The real issue now is that demand is so weak because people don’t want to buy homes when their income prospects are so weak. When they are worried that house prices are going to fall further and until we can see that demand rise again we are not going to see home-building rise in a way that is contributing to economic growth,” Dynan said. Many economists say that fear of the unknown is feeding consumers’ hesitancy. That fear has rocked global financial markets, following a downgrade of U.S. Treasury debt and a long-running and highly fractious political debate over raising the nation’s debt ceiling.

“Pessimism can be self-fulfilling. If a consumer wakes up one day and is worried about the future and doesn’t go out and spend, then retailers are going to see weak demand and they are not going to hire as much and income will weaken and that in turn will leader consumers to have even less inclination to spend,” Dynan said. Hudson says that with his personal income down by more than 50 percent, he’s certainly spending less. And he’s worried about what’s to come. “If there’s a recession, I don’t know what I would do because I have cut as much as I could, I believe. I guess I could do more but it would be difficult. I have cut as much as I can at this point, so it’s kind of a scary question,” Hudson said.

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See also:

World Bank Chief Warns of New Danger Ahead
August 13, 2011 - The president of the World Bank is warning the world's already troubled economic recovery is in even greater trouble.

World Bank chief Robert Zoellick told The Weekend Australian newspaper the global economy has entered what he called a "new and more dangerous phase."

In the interview, published Saturday, Zoellick put most of the blame on debt problems in Europe. He urged European leaders to tackle the debt crisis with more urgency but said there is little finance officials can do with monetary policy to ease the strain.

He also expressed concerns that the recent riots in Britain could dissuade the government there from moving forward with a series of announced austerity measures.

Zoellick is in Australia for an official visit and is scheduled to meet with Australian Prime Minister Julia Gillard and other top officials. He said Australia's close ties with many growing East Asian and Pacific economies should help the country's economy in the short term.

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Silhouette · Aug 16, 2011

Pessimism can be self-fulfilling
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Indeed. What is the purpose of this thread again? Saying people are worried about a double dip recession is like saying water is wet. Is the OP trying to foster increased panic and pessimism?

Panic the herd?

SiliconMagician · Aug 16, 2011

A double dip recession will be nothing compared to the economic collapse that will happen if Democrats continue to insist that systemic entitlement reform is off the table. Yes, austerity causes a recession, but that recession is necessary to save America. We are going to have to adopt a more Laissez Faire attitude towards society if we are going to survive.

As far as I'm concerned until Democrats actually surrender on that point and actually make bipartisan attempts to reform them on the level that Paul Ryan wants, I'm not interested in tax increases on anyone.

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