Submitted by Yi-Wyn Yen02.05.2009
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This prediction is closed and has been judged.
Financial experts can't agree on how long this recession will last. Renowned economist Martin Feldstein says the U.S. recession will last beyond 2009. Feldstein was the former president and founder of the National Bureau of Economic Research.
Meanwhile, Nouriel "Dr. Doom" Roubini, chairman of RGE Monitor who correctly predicted in 2006 a worldwide recession and a housing market collapse that would lead to a credit crunch, says the U.S. recession will last 2 full years. The NBER declared last December that the U.S. recession started in December 2007.
Former Secretary of Labor Robert Reich believes it's unlikely that the White House and Congress will let us fall into an economic depression. And Donald "You're Fired" Trump has determined that the U.S. is already in a depression.
The Federal Reserve predicts that the U.S. economy will recover in the second half of 2009, though unemployment will continue to rise in 2010.
Prediction: The U.S. recession is over by the end of 2009. Rather than wait for the NBER data to make a ruling (which could take 6-12 months after a recession is over), we'll look at the GDP growth rate from the Bureau of Economic Analysis. Two straight quarters of negative growth rate indicates that we're in a recession.
Price History
Prediction Statistics
| Betting Closes: | Jan 31 2010 | Current Consensus: | 93.70% | Total Bets: | 58 |
| Today's Change: | 19.62% | ||||
| Life Time High: | 93.70% | ||||
| Life Time Low: | 37.75% |
Comments
Is one quarter of growth (i.e. positive GDP growth rate) the end of the recession?
For the sake of this prediction, yes.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
So, if QIII shows a positive growth rate, but QIV shows a negative, we will have been considered to out of the recession by QIII?
One quarter of positive growth doesn't seem to be an accurate indicator. I suggest the same rule for calling it a recession; two back-to-back quarters of positive growth
Seriously... 2 back to back quarters seems like reality...
How does GDP and unemployment correlate if at all? With the new unemployment numbers out, and they rose to the highest point since 1983 that can't be good. (and yes like most who watch, I agree these are very under-reported as there are many unemployed over 1 year by now and off benefits who are no longer counted.)
Also I see this has risen to 74%, is that people who think it will end by year's end?
Dave: I can't answer your first question, but to your second question, yes, the community consensus favors an end to the recession (according to the GDP-based prediction criteria).
I think that's probably a reflection of headlines in September, which were generally positive about the economy. However, in the past few days I've seen some negative indicators reported in the WSJ, and the Dow has also dipped. Some professional money managers (most notably, Peter Thiel) seems to think we've seen a false recovery in the past six months, which is not reflected in the fundamentals.
Time and GDP data will tell ...
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
twitter.com/ilamont
@Ian - I tend to agree that is a very false recovery and agree that we are a long way out. Big time industries as a whole such a restaurants and automotive are still being hurt immensely and with unemployment at a reported 10% that's a huge portion of the US population that will be not be spending as much.
I have also seen more than a few articles regarding the average out of work person taking on multiple part time jobs to make ends meet, but of course the biggest failing in those jobs, lack of healthcare. I think this lack of healthcare will impact the long term cycle and that's without any major illness, such as H1N1. For example, Dentists are being hit hard as people opt to ignore their checkups. Of course neglect leads to other issues.
Downward spirals abound for now. I truly hope that the US becomes a stronger less credit reliant country as a result of this downturn....whew..that was quite a soapbox.
Again thanks for the dialog.
GDP numbers just released and recession is officially over.
This prediction can now be judged. Official GDP news (up 3.5%) can be found here http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Thanks David. Judged, based on this release.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
twitter.com/ilamont
I got taken to the cleaners on this one, but fwiw, I still don't believe this recession is anywhere near being over. I think this time 2 years from now we'll still be talking about the recession in present tense.
Marcus,
I've just created a prediction relating to the economic situation that you might be interested in:
U.S. unemployment rate tops 10% by the end of 2009?
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
twitter.com/ilamont
Ian, wait a minute, this release was an "advanced estimate". It's not official; it's susceptible to revision.
I say wait until the real numbers come out.
And I still believe that the judgement should be based on two successive quarters, like the BEA uses, to say that the recession is ended.
There would have to be a major error in the calculations for me to reverse the judgment -- I can understand it being off by a few tenths of a percentage point, but for the estimate to drop from 3.5% to less than 0% would be unprecedented.
Ian Lamont
Managing Editor
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