The recovery from the Great Recession – technically December 2007 to June 2009 – has been described a lot of different ways, none of which are particularly encouraging: sluggish, weak, jobless and even anemic. But what if it hasn’t been a recovery at all?
This morning the U.S. Commerce Department released new data that showed that real GDP – “the output of goods and services produced by labor and property located in the United States – increased at an annual rate of 1.3 percent” from April to June of this year. While this is technically growth and not contraction, the numbers were less than what economists expected and clearly a disappointment when markets are already skittish over debt limit drama in Washington, D.C. But adding to the bad news, the Commerce Department also released revised data that showed the amount of growth during the “recovery” had been overstated.
For 2007 to 2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously published estimates, real GDP had increased at an average annual rate of less than 0.1 percent. From the fourth quarter of 2007 to the first quarter of 2011, real GDP decreased at an average annual rate of 0.2 percent; in the previously published estimates, real GDP had increased at an average annual rate of 0.2 percent.
According to Justin Wolfers, an economist at the University of Pennsylvania, these new revisions might mean that we’re in the midst of another recession. “Did we double-dip and no-one noticed?” he asked on Twitter this morning. “My bets: 40% chance and peak was 4 months ago.”
While the official declaration of a recession – if we’re in one – will probably not be for some time (the recession that started in December 2007 was not announced in until December 2008), we may be soon able to add a new description to the recovery: nonexistent.