Is It or Isn’t It?

By Andrew Paparozzi
In December 17, 2009

Recently, President Obama’s top economic advisors gave what on the surface appear to be conflicting statements on whether the recession was over or not. So what is the answer? It depends— not on a definition of the term—but rather on how the question is being approached. If we’re answering the question strictly from a statistical vantage point, the answer seems to be “yes.” The economy as measured by gross domestic product (GDP) has stopped declining. On the other hand (spoken like true economists,) if we approach the question viewing the average well-being of individuals, one can make the case that the recession may not be over.  Remember, with a growing population, an economy has to grow by a certain percentage just to remain in place on a per capita basis. And a certain number of jobs need to be created just to absorb net new entrants into the labor force.

In any event, data continue to suggest that the economy is healing and a recovery will take hold. The latest consensus from Blue Chip Economic Indicators has inflation-adjusted GDP rising 2.7% in 2010, following a 2.5% decline this year. For a discussion on the improving expectations reflected in the Blue Chip consensus see the State of the Industry post dated 12/09/09 “Crawling Out of the Abyss” at NAPL’s Performance Indicators website. As with any consensus forecast, it consists of more optimistic and more pessimistic outlooks. However, even the bottom-10 of the Blue Chip group has GDP rising 2.0% next year. But note, if you’re mired in the debate on whether the recession is over or not, or on its strength or lack thereof, you’re missing the point.

Yes, the economy is improving. Nonetheless, you may be setting yourself up for some serious disappointments if you’re primarily counting on a better economy to make everything right. Not everyone will participate in the recovery equally—some won’t participate at all. Recessions lead to market redistribution. And as discussed in NAPL’s State of the Industry Report, Eight Edition, being on the right side of redistribution hinges on much more than the level of economic activity.

Andrew Paparozzi    Joseph Vincenzino    Kong Lue Wang

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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