Something is Missing Between the Buns.
The recession that began in December 2007, has not officially been declared over. The prior post, The Recession is Probably Over, But The Fat Lady Hasnt Sung Yet., dealt with who officially declares when a recession is over and the analysis that is used. It appears there are two major items that have not turned around: Real Income and Employment. Without positive gains in these areas, it is very hard to believe growth will be sustained.
For Real Income, the Business Cycle Dating Committee gives significant weight to Real Personal Income Less Transfer Payments. Both it and Real Personal Disposable Income were still declining in the third quarter.
But more troubling then Real Income, is the employment situation. As of December we were still shedding jobs on the whole. The size of the loss has been growing smaller so the trend is right. However, a loss is a loss and until we can sustain some job growth, one has to be skeptical that overall growth will endure.
Put together, the consumer based US economy will need to start creating net new jobs and this should lead to rising Real Income. With that, Real Consumption and RGDP have a chance of at least some sustained low growth. Until then, I wouldnt look for the BCDC to enter the stage lights and sing out, thus declaring an official end to the recession. In the meantime they are likely to acknowledge improvements elsewhere and reply Wheres the Jobs?
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