US economy to continue recovery - economists guess

http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become more confident 19 months after the worst recession since the Great Depression ended. Lower Social Security taxes and higher stock prices will embolden Americans to spend more and help power the economy, they say.

"People will finally recognize that an economic recovery is under way," said Lynn Reaser, a board member of the National Association for Business Economics. "This won't be a recovery seen only by economists."

Questions:

1) Did anyone actually notice that the recession ended over a year and a half ago?

2) Why is there such a growing disconnect between economists who paint a rosy picture consistently and the "person in the street" who, in my experience, will swear up and down and around that the economy sucks?

3) Are the economists basically just guessing or are these projections reliable?

4) Does anybody even care that 35% of federal spending is deficit spending?

5) Where did my other dark blue sock go? I put both of them in the wash and only one came out! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

I wouldn't say economists are that optimistic. The recession ended (at least technically), but between the tempest and sunshine there's a whole array of possibilities.

I don't know how reliable that survey that was, but I'd expect most economists surveyed to not have done any forecast themselves. They probably read forecasts by certain institutions or other economists. That's all I did, too, but I didn't get any impression of a rosy picture. Here's some quotes from the NBER Business Cycle Dating Comitee and the FOMC (Fed).

NBER (September 2010, their last pronouncement):

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. [...] Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

FED (yesterday!)

Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit.

So the idea is that the bleeding has stopped but there's still a lot of healing to do.

Originally posted by sh76
http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

[quote]But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become mor ...[text shortened]... ut! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

1) Yes, I read about it.

2) Because people generally lag behind developments when it comes to confidence.

3) Somewhere in between.

4) Yes.

5) You will find it in Q3 2011.

As for federal spending, a lot of people care. There are some webcasts of a panel discussing in the January American Economic Association meeting but I haven't watched them yet.

Originally posted by sh76
2) Why is there such a growing disconnect between economists who paint a rosy picture consistently and the "person in the street" who, in my experience, will swear up and down and around that the economy sucks?

People don't understand that "not being in a recession" does not mean "being at normal capacity". Also, a lot of the media focuses on financial markets and so economic journalism is biased towards Wall Street developments rather than Main Street ones.

Originally posted by sh76
http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

[quote]But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become mor ...[text shortened]... ut! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

You wear dark blue socks?

I'm of the opinion that the unemployment rate might drop significantly faster esp. if any of the investment proposals made by President Obama are enacted.

Originally posted by sh76
http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

[quote]But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become mor ...[text shortened]... ut! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

I don't know, but I found an extra dark blue sock this morning and it isn't mine.

Originally posted by sh76
http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

[quote]But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become mor ut! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

1. Economists like to label things i.e. recession, recovery etc. There labels have little to do with the real world. Just ignore them.

2. The economy does suck, and it's going to stay that way for quite awhile regardless of what the economists say (see # 1)

3. Yes...people do care that there is too much deficit spending (but do they care enough to demand a change in spending habits? Hmmmmm)

4. Try your top dresser drawyer again, that's where I frequently find mine.🙂

We've had jobless recoveries before and we'll have them again. When a Republican is in office the news will make a big deal out of the fact that jobs aren't being created. If a Democrat is in office the news will make a big deal about the fact that the economy is in a recovery. (Unless you are talking about Fox News, then what gets reported will be switched)

Originally posted by sh76
http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

[quote]But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become mor ut! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

1) I noticed

2) My experience is much different - everyone that I know who lost a job has gotten a new one. I had a salary cut at my job, and I, and everyone in the company, got a raise to bring us back to where we were pre-recession. In addition to the rollback of the cut, i actually got a salary increase, for the first time in 8 years. My portfolio has fully recovered and is up from the beginning of the great recession.
Could things be better? Of course, but I definitely see evidence first hand of the economy recovering.

3) I don't believe economists have a clue. I think they're like the rest of us and they're only projecting based on the current trends, and yes, I think that's up. I don't have great faith this next cycle will be a long-lasting golden age... but I do think we're headed for better times in the short term.

4) I do. The services we're getting from our government suck. Part of the reason is that we're wasting money paying our debts. That's not how I manage my wallet, I want more from my money. Politicians do not care. It'll be payed for by their replacement.

5) Try looking inside the one sock that came out. Alternatively, do you have an extra light blue sock? Perhaps too much bleach?

Originally posted by joneschr
3) I don't believe economists have a clue. I think they're like the rest of us and they're only projecting based on the current trends, and yes, I think that's up. I don't have great faith this next cycle will be a long-lasting golden age... but I do think we're headed for better times in the short term.

If you don't even know how they forecast, why do you presume to believe economists don't have a clue?

😕

Originally posted by sh76
http://news.yahoo.com/s/ap/20110127/ap_on_bi_ge/us_ap_economy_survey

[quote]But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become mor ...[text shortened]... ut! Is there a disruption in the space-time continuum in everyone's dryer or just mine?

The recession never ended in reality. The government economic numbers are bogus to prevent panic.
How bad things are depends on where you live. I live in Michigan and things are bad here!

Originally posted by Metal Brain
The recession never ended in reality. The government economic numbers are bogus to prevent panic.
How bad things are depends on where you live. I live in Michigan and things are bad here!

I hear the tinfoil business is doing very well, though...

Originally posted by KazetNagorra
I hear the tinfoil business is doing very well, though...

That's what they said when I suggested there was a housing bubble ready to burst.
What was that, a lucky call?

Originally posted by Palynka
If you don't even know how they forecast, why do you presume to believe economists don't have a clue?

😕

Because they are correct as often as my coin.

What's wrong with my statement - I guess you are arguing that they are projecting based on future events? They can see the future?

My point, clearly missed, is that I think events such as outbreak of war or collapse of trade more significantly influence the economy than current trends -- and economists have no more insight into when such things happen than you or I.