Back to Back

By Andrew Paparozzi
In August 1, 2008

The two most widely watched indicators for the overall economy— GDP and the employment situation—happened to be released back to back this week. Did they shed any significant light on where the economy is and where it’s going? Yes and no.

As to where the economy is, it’s weak. According to the Bureau of Economic Analysis (BEA), GDP adjusted for inflation rose at an annual rate of 1.9% in the second quarter, as consumer spending got a boost from rebates and exports remained strong. The previous quarter was up 0.9%, revised data show that thus far the weakest quarter in the slowdown was the fourth quarter of 2007—0.2%. Are we in recession? Based on the latest data not yet. Are there sectors and industries in recession? Definitely. Just look at housing and transportation.

On net, the economy continues to shed jobs. The Bureau of labor Statistics (BLS) reported that employment on nonfarm payrolls fell for the seventh straight month in July, with jobs down 51,000 for the month and 463000 year-to-date. The unemployment rate has risen to 5.7%. While low by historical standards, nonetheless the figure is at a 4 year-high. Recession or not, the economy is weak. Where is the economy going? It’s hard to judge from the GDP and employment data—they aren’t forward looking. But until the clouds over the financial system clear, one would have to consider that risks are to the downside.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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