Thursday, October 30, 2008
The US economy shrank .3% in Q3. The sky isn't falling yet but there is actually some sort of credence to the idea that we might be in a recession now. It really depends on if we bottomed out here or not. It also depends on the accuracy of the Q3 estimates. Over the next two months we'll get better estimates. I doubt the initial figure is down by .3% though. The nearest point of time when we'll know with reasonable certainty that we're in a recession is Jan 09. But for the time being assuming we're in a recession is at least a reasonable assumption (far more reasonable than when we were coming off almost 3% growth). After almost two years of economists telling us a negative growth quarter is unavoidable next quarter, they finally got one right. If they get another one right, they'll be as accurate as a broken clock.