March 13, 2008
Can we avoid a recession?
The government recently said the economy actually grew in the last three months of 2007. Some are pointing to this finding as support for the view that the economy is not in a recession. Are they right? Listen
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"What this number was is the initial estimate of economic growth in the fourth quarter, and it showed the economy grew on an annual basis at a very slow .6 percent. Still, it was a positive number, not negative, so some are pointing to this, saying perhaps the economy is not as bad as many had thought. But there are probably a couple of reasons why it's too early to celebrate. First of all, this number will be revised, in fact, twice. And it could easily end up being a negative. Secondly, if it still turns out to be positive for the fourth quarter, we could still have negative growth in this current quarter we're in, in 2008 as well as in the second quarter of 2008, which means we'd have two back-to-back quarters, and we would qualify for a recession. I think the bottom line here is that whether we have slow growth or negative growth, the economy is still likely to crawl, certainly through the early part of 2008."
Posted by Dave at March 13, 2008 08:00 AM