What Recession?

I don't remember if it was last week or the week before, but with the recent first quarter reports in it looks like we're already coming out of the recession that we never got into in the first place. I think the simplest measure of whether or not we're actually in a recession is if GDP goes through two straight declines. For the first quarter of this year it grew at a modest 0.6%, and prior to that the GDP had yet to show any kind of decline. I've recently been reading more of Larry Kudlow's stuff on NRO and he wrote about this subject in this article here. He has a blog that he regularly updates here. And here's one more article for good measure.

With the Democratic campaign turning into the war of attrition that it has become, the party as a whole is trying to portray the economy as being in the worst possible shape. The way Obama and his wife talk about it, you'd think that we're going through another depression. The crazy thing is, with unemployment being just under 5%, it's historically low. If you look at times when the country actually was suffering through real economic downturns, those numbers range from 7-10%. For a fifteen year period from the mid-70's to the last 80's, the number never dropped below 5%, hovering mostly in that range I just mentioned. In fact, for the last 5 years that rate has remained remarkably static. Again, this is an attempt by the left to paint the GOP presidency as a failure. Even the Dow crept up over the 13,000 mark a few days ago for the first time since January. It's been hit pretty hard with the rising cost of oil the last few days, but the economy has been very resilient as of late.

This is an excerpt from Kudlow's article:

President George W. Bush may turn out to be the top economic forecaster in the country.

About a month ago he told reporters, “We’re not in a recession, we’re in a slowdown.” At a White House news conference a few weeks later, despite the fact that reporters pressed him to use the “R” word, Mr. Bush refused. And on Friday, after the most recent jobs report — which produced a much-smaller-than-expected decline in corporate payrolls, a huge 362,000 increase in the more entrepreneurial household survey (the best gain in five months), and a historically low 5 percent unemployment rate (4.95 percent, to be precise) — the president told reporters: “This economy is going to come on. I’m confident it will.”

We’re in the midst of the most widely predicted and heralded recession in history. Problem is, so far it’s a non-recession recession. Score one for President Bush. In an election year, it could be a big one.

First-quarter GDP growth came in at 0.6 percent. It wasn’t the widely predicted decline, and economists expect that number to be revised up. GDP growth for the fourth quarter of 2007 was also up slightly, while the prior two quarters averaged over 4 percent growth.

My pal Jimmy Pethokoukis quotes Stanford professor Robert Hall, who heads the recession-dating committee at the National Bureau of Economic Research: “It seems unlikely that we would ever declare a peak-date when real GDP continued to rise.”

Interesting — isn’t it? — just how durable and resilient our low-tax, free-market, capitalist economy truly is. Hit by soaring food and energy prices, a bad housing downturn, and a Wall Street credit crunch, the economy continues to expand, albeit slowly.

I just thought that was pretty interesting.