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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Les H who wrote (22597)7/31/2004 8:44:25 PM
From: Les HRead Replies (2) of 306849
 
No recession in 2001 after all

The Commerce Department also revised growth figures back to 2001, providing new evidence that the recession that began in March of that year may not have been a recession at all.

Instead of three straight quarters of economic decline, the revisions showed the economy fell by 0.5 percent in the first quarter, increased in the second by 1.2 percent, then declined by 1.4 percent in the third quarter, when the Sept. 11 terrorist attacks slammed the economy.

Usually it takes two straight quarters of economic decline to qualify as a recession, but that is only a rule of thumb. The final decision rests with the National Bureau of Economic Research, a private economic research group that specializes in business cycles.

That group has already declared that a recession began in March 2001, as Bush was taking office, but the new figures may trigger a reassessment. If the period turns out to be a recession, it will be one of the mildest on record, despite heavy job losses.

Tax cuts sparked by recession

President Bush partly justified his tax cuts on grounds that the economy had sunk into a recession. His Democratic critics say the tax cuts were far too expensive and tilted to the wealthy.

This year's second-quarter slowdown in GDP was caused chiefly by the caution of consumers, who surprised analysts by scaling back spending more than expected. Economists blamed higher oil prices and declining wages after adjustment for inflation.

chicagotribune.com

good thing higher prices and inflation aren't synonymous.
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