What Recession?

"this report of my death was an exaggeration" – Mark Twain

Last week the economic data for the 4^th quarter of 2007 was released. Much to the dismay of the media who have been reporting that we are in a recession, real Gross Domestic Product (GDP) actually grew 0.6%. Somehow, I missed the big headlines that they got it wrong.

In order to be in a recession there has to be a reduction in real GDP for two consecutive quarters. Since the last quarter showed no reduction in GDP, by definition the earliest we could now declare a recession would be July of 2008.

To the financial media, I'm sorry. You must be so disappointed. A headline of "The Sky Is Falling" probably sells better than "It's not as bad as we feared". Of course, you could have read about it here first…

What other blogs say about this news:

• Stop saying "recession"
• Q4/07 GDP +0.6%; Better Than It Looks
• What is the "definition" of recession

Crash! by AlextheC@t