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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Murrey Walker who wrote (47307)	1/31/2002 11:29:03 AM
From: stockman_scott	Respond to of 65232

Recession? What Recession? Thursday January 31, 9:02 am Eastern Time Forbes.com By Mark Lewis So the recession, it turns out, was over before it began. That's not just a figure of speech; it's literally true: The economy apparently began growing again last quarter just as it was officially declared to be shrinking. The usual rule of thumb is that gross domestic product must contract for two consecutive quarters before a recession is declared. By that measure, the "r" word never really applied, and we're still in a mere slowdown. But the National Bureau of Economic Research declared last November that the nation was in a recession that had begun the previous March. Rather than quibble with these eminent economists, let's just call it a recession and declare it over, rather than pretend it never happened in the first place. Besides, the tepid fourth-quarter growth reported by the Commerce Department yesterday was preliminary; the final figures may show a decline. Nevertheless, the world looks rosier this morning. Whether it grew a little or shrank a little, the economy did better than expected last quarter, rebounding from the hit it took on Sept. 11. Most signs point to a continued upswing. The Federal Reserve ratified the optimistic mood yesterday by leaving short-term interest rates unchanged, after cutting them 11 times last year in a bid to revive the stalling economy. "With the forces restraining the economy starting to diminish, and with the long-term prospects for productivity growth remaining favorable and monetary policy accommodative, the outlook for economic recovery has become more promising," ChairmanAlan Greenspanand his fellow Fed mandarins said in a statement. The stock market, which had failed to react much to the Commerce Department report in the morning, took its cue from Greenspan in the afternoon. The blue-chip Dow Jones Industrial Average led the major market indices by gaining 1.5% on the day. The Fed was careful to note that economic conditions remain uncertain. And indeed, unemployment is expected to continue rising for at least the next few months. But consumer confidence is growing, durable goods sales are rising and the debate now is shifting from when the recovery will begin to how strong it will be. President George W. Bush and congressional Democrats still are wrangling over the proposed economic stimulus package, which may no longer be needed to jump-start the economy, but which will help determine which side gets to claim credit for the recovery. Of course, if technically we never were really in a recession, then technically we won't be in a recovery. But recoveries are fun things to experience, so America may as well treat itself to one. To say that the economy is "emerging from a slowdown" seems too vague; it lacks drama. So call it a recession, and call it over.