Some data in the NY Times:
New figures showing a decline in wholesale prices and a drop in new-home construction highlighted how weak the economy remains, even as some optimists declare the recession to be over.
Producer prices fell more than expected in July as the costs of food and energy slipped, the Labor Department reported on Tuesday. The 0.9 percent monthly decline came after three months of increases, and suggested that demand was weak up and down the ladder of production, from consumer goods to intermediate goods like chemicals and rubber to raw materials.
Producer prices declined a record 6.8 percent from last July, when crude oil prices soared above $145 a barrel and pushed the costs of fuels, food and other products sharply higher, before they fell back amid the global financial crisis. The decline in the last 12 months is the largest drop in 60 years, since the government starting keeping such records.
How long do you all think it will be before there is a meaningful economic recovery?
LosGatosCAa
If the measure of meaningful recovery is unemployment below 6% then 2013 at best.
Napoleon
It will be at least a couple of years.
Violet
At least another year. Unemployment is going to remain very high for that long, imho.
Da Bomb
We still digging out of that ditch. It will be a while. It took us a while to get into to this fiasco. It will take a while to get out.
cleek
next week
Punchy
CR and Barry R. have been all over this. How laughable it is to declare the end of a recession with housing prices still falling and so few sales.
Loss of home equity begets loss of spending power, which begets stagnant growth, which leads to greater job losses, which begets a lot of other shitty side effects.
Napoleon
PS, I don’t think the recession is over by the way. I think it will be closer to the end of the year/beginning of ’10.
Hunter Gathers
Right before Sarah Palin is ‘elected’ Queen of Real America, after the Civil War of 2011.
beltane
I’m not seeing a recent decline in energy or food prices. Yes, it’s better than a year ago, but gas is $2.69 a gallon by me, which is higher than it has been in several months. Food is not noticeably cheaper either, and I’ve seen that 50# bags of flour (I buy in bulk) have gone UP in price over the past month.
It looks like we’re getting wage deflation without any meaningful commodity deflation. Lots of fun.
jonas
A year to go before we see any meaningful improvement in unemployment and probably another year after that before the consumer sector really starts going again. By the time the 2012 election gets underway, Obama will probably be able to take credit for a solid recovery, but we’ll see how much of a political liability the huge deficits it took to do it will be.
DougL (frmrly: Conservatively Liberal)
I really expect things to suck for at least the next five years. We are too deep in the hole and our job/pay situation sucks. People are buried in debt and the government is more so, shit still costs too much and Goldman and the like are still sucking the economy dry. The banks/credit card agencies still want to pretend everyone has bottomless pockets and are screwing the pooch before the new laws take place. States are looking at some tough times ahead and they know it.
The Depression was a bit of a rollercoaster and I expect this to be more of the same, if not more severe. We aren’t seeing the light at the end of the tunnel, we’re seeing a distant reflection.
While we are in the tunnel, it can still cave in before we get to the end.
Zifnab
@LosGatosCAa: France has declared itself in “recovery” with a GDP leveling out to a .3% growth, and they are never ever going to have unemployment below 6%.
Of course, in the states it’s a different game.
ThatLeftTurnInABQ
If Japan’s Lost Decade (more like two) is any indication of what to expect from our zombie bank economic overlords, then I call dibs on 2023.
Pangloss
I think unemployment will begin to drop in Spring 2010. Pent up consumer demand can’t be contained for very long in a superficial, spoiled culture like we have.
Billy K
18 months. But we’re not going back to the way things were from say ’95 – ’05. The recovery will feel like a big step back, because… well, it will be.
scav
Meaningful to whom.
Downpuppy
With oil ready to go through $100 at the first whisper of recovery, this century is going to be all about fighting over pieces of a steadily declining pie.
I figure about 2 more years before people start to understand that.
jcricket
I will make this a bad news/good news post.
First, I think unemployment won’t crest for another year or so, and sadly, a lot of the jobs people are getting pay less or have fewer benefits than their previous jobs (much like the last recession, where middle-class manufacturing jobs were replaced with lower-middle class retail/hospitality jobs). Without meaningful economic reform (healthcare, progressive taxation, better safety net programs) each recession is likely to worsen the position of people already marginally “hanging on” to begin with.
Second, the recession might actually be over for me, because I managed to find a job (after only 3 months! woot!) – and it doesn’t suck. On the downside, that means less time to comment on BJ. On the upside, it means not trying to survive on 1/4th of my income and that I can “take advantage” of the “historically low” stock prices to rebuild my 401k. Yay for me.
On a related note, being unemployed (this is not my first time) has left a lasting imprint on my personal politics. I was always liberal, but it’s made me realize just how stacked the deck is against the poor and lower middle class. I can survive an economic shock like losing my job with barely a ripple, long-term (except for depleting my short-term savings and the hit to my resume). But how people barely making ends meet handle it is simply beyond me. We need a better safety net. Pronto. Like yesterday.
joe from Lowell
If Wall Street’s performance shouldn’t be taken as a good indicator of the overall economy, neither should the real estate market.
Just as the housing bubble provided real estate indicators that didn’t accurately reflect what was going on in the real economy between 2001 and 2007, so does the hangover from that bubble provide real estate indicators that don’t reflect what is going in the real economy.
Remember, the real estate market became unmoored from the actual economy because of financial-sector shenanigans? Production and sales prices went through the roof based on a speculative market, rather than the actual growth of the economy?
Same thing here. We’ve got 1) a hangover of excess inventory from the bubble, 2) people upside down in their mortgages who can’t buy a new house, even if they’ve got enough money together for a down payment, 3) damaged banks that aren’t keen to loan, and 4) a “irrationally pessimistic” (sort of like “irrationally exuberant, but the opposite) real estate investment market.
eztempo
It appears we’re getting a “double-dip” recession since the Federal stimulus spending didn’t hit street level demand quick enough. That’s gonna shake confidence both on Wall Street and on Main Street (I hate the cliché) and extend high unemployment and therefore recessionary conditions through to late 2010.
Bad news for Dems.
PeakVT
The somewhat abstract GDP numbers will start growing in 4Q 2009. The more meaningful employment numbers won’t start growing significantly until early 2011 after hovering near the bottom during 2010.
Steve LaBonne
I’m with ThatLeftTurnInABQ. We’re still near the beginning of our very own Lost Decade. Thanks a bunch, Summers and Geithner.
For those who think there’s going to be any kind of recovery any time soon, I remind you that the commercial real estate mess is only just beginning to hit the fan. The zombie banks won’t be expanding credit any time in the next few years.
Brick Oven Bill
I will have my meaningful economic recovery as soon as I can get my hands on Obama’s secret records from Columbia University. Wall Street has their hands on Obama’s secret records from Columbia University, and they are having a meaningful economic recovery. In like manner, this is when I will have my meaningful economic recovery, I predict.
Either that, or when I get my pizza take-out place up and running. Pizza is a very economical and nutritious food.
linda
not in our lifetime… the way things are going, i’m guessing, never. just like it was planned.
Zandar
2011, maybe 2012.
If we’re talking about serious middle class growth, forget it. The new Gilded Age is upon us. The U.S. is on its way to being the most imbalanced country on Earth.
gopher2b
3-5 years
SpotWeld
How long do you all think it will be before there is a meaningful economic recovery?
I suspect that home heating costs over the coming winter will have the most direct impact on “economic” recovery.
A reasonable sector of the US ecconomy is sort of dependent on the end of year-seasonal boost of holiday shopping.
Actual recovery will give people enough of a buffer to cover the necessities and still have the end of yer uptick.
The reality will probably be a fairly tepid holiday shopping season with a bunch of pundits stroking chins and wondering “Has Obama failed?”
Also.. B.O.B. will say something stupid.
Keith G
@Brick Oven Bill: You remind me of Cosmo Kramer. You make no sense, but if taken in very small amounts, you can be mildly entertaining.
cbear
Not until we put some real teeth into those “death panels”– convene them– and put a few bankers and Wall Streeters in front of them.
And I’m only slightly kidding.
How does a society (or an economy) function, much less thrive, when those at the very top are able to essentially steal everything that’s not nailed down and suffer no penalty?
Brick Oven Bill
If only I had access to the secret Columbia Records, I could make make Tim Geithner jump up and down while swearing at girls, if people did not come to eat my pizza.
This would help me to have a meaningful economic recovery. Perhaps it is time to launch a ‘National Treasure’ type expedition, to find these secret Columbia Records and save my take-out pizza place. This would seriously be a good movie to write a screenplay for and sell to Andrew Breitbart. Copyright 2009.
Crashman06
@Brick Oven Bill: Damn you. I want pizza for lunch now.
Keith G
@Brick Oven Bill: Smakll amounts, small amounts.
The Raven
No-one knows. As the Shrill One says,
. In another article he discusses the historical record and concludes
hidflect
Remember how all those Wall Street gurus proclaimed a “new paradigm” every 2-3 years after 2000? And it wasn’t? Now they’re keeping their mouths shut. Coz it IS a new paradigm now. See how this works? Take what they say and reverse it. But it’s a case of; new paradigm, same as the old paradigm… serfdom.
JGabriel
Fifteen to eighteen months. I haven’t read the rest of the comments yet, but I won’t be at all surprised if that’s optimistic outlook.
.
joe from Lowell
Brick Oven Bill
I will have my meaningful economic recovery as soon as I can get my hands on Obama’s secret records from Columbia University.
God bless the Republicans. It’s comforting to know that even when presented with something that generates as much public concern as the state of the economy, we can count on them to demonstrate their utter irrelevance by choosing, instead, to yammer of Birf Certifikits and the like.
Athenawise
Three to five years at least, and even then America will be a shadow of its former self — and we uber-consumers have only ourselves to blame. I wouldn’t be surprised if Wall Street is disseminating a false sense of optimism based on the flimsiest of upticks so it can get back to the business of making money.
teak111
When a new wave of innovation force companies to hire back or loose out. Personally, I think we are looking at 9-10% unemployment for at least five more years.
Isn’t the engine of the economy the opportunity to make $$$. The 80s had computers, the 90s had the web, 2000 was real estate and financial instruments.
Tell me what real innovations are coming in 2010 and I’ll tell you when the recovery starts.
Punchy
TPM is reporting that Bob Novak just kicked.
RIP, you hac….nevermind.
PaulW
In my mind, there won’t be a full economic recovery until I get a new full-time job that pays well.
Sigh.
JenJen
Off-topic, but:
Robert Novak has died.
http://washingtonindependent.com/55441/bob-novak-1931-2009
linda
tpm saying that novakula has died.
lamh31
OT, Fallow PWNS Niall Ferguson:
“Ferguson, Obama, Felix the Cat — and Pluto”
http://jamesfallows.theatlantic.com/archives/2009/08/ferguson_obama_and_felix_the_c.php
Trinity
@lamh31: That.Was. AWESOME.
JGabriel
jcricket:
It’s not that the money isn’t there for people to have better incomes, it’s that the wealth and the profits are being hoarded by the well-off. Right now, the income is about the worst it’s ever been in this country. Worse than Brazil’s; worse than the gilded age.
So, I expect wages and benefits will increase when this recession is over. There isn’t much room for them to go down, and if they don’t improve, then the upper class may finally get that class war they spent much of the 20th century dreading.
Also, just from a statistical perspective, the income gap is at a peak and can’t keep increasing forever. It has to start shrinking again at some point, and I hope and suspect that will be shortly after this recession ends.
Unless inflation is really high at that point. Then we might have to wait a couple years longer.
.
KXB
Currently, there is a tax credit for first-time homebuyers that can be worth up to $8,000. But it expires at the end of November. Expect a rise in home sales up to that point – some legitimate, and a lot of phony sales to take advantage of the credit – followed by a steep drop in December.
JGabriel
@Zandar:
Not “on it’s way”. Brazil held the title until Bush II came along, then it switched over to us in his first term. We’ve been teh most imbalanced country on earth for at least half a decade now.
.
JGabriel
@Brick Oven Bill:
BOB, isn’t it a little early to be drinking, or doing mushrooms?
.
Leelee for Obama
@Athenawise: I am not an economist. That must be my first caveat. Also, I am Irish; we always expect the worst, hope for the best. It’s an ethnic and personal necessity.
Given these statements, I think we are in for a re-alignment of priorities. It will be years in the making, and many Americans, myself included, I’m afraid, are going to really get hammered. We will have to continue saving more and spending less, which is necessary for debt reduction and fiscal survival. We will not have enough great jobs available for the blue-collar workers we have, and will need to educate our young people to compete in the global market from above the neck. Government will grow, and people will have to let it do so, so that there will be safety nets for this era’s “Forgotten Man” and Woman. Amity Shlaes head will explode, Megan McArdle will weep copious tears and John Boehner will retire to Somalia.
That’s all I’ve got.
The Prince of Darkness is gone-I will not speak ill of the dead, nor will I mourn.
T. O'Hara
Hey, wait a minute. I thought Democrats passed that bloated American Recovery and Reinvestment Act of 2009 because it was supposed to cap unemployment at <8% in 2009Q3. What happened?
IndieTarheel
I say things will start to turn in 2011, but the agents of S.C.U.M. (So Called Unbiased Media) will either ignore it, or claim it would have happened sooner without Obama’s soc!@list meddling.Also, BoB’s a paragon of willful ignorance. Too.
arguingwithsignposts
I don’t think consumer spending will ever go back to the levels it was at, until this generation is gone. I know I won’t be spending at the pace I did ever again, and I plan to teach my kids the same lesson.
Downpuppy
@JGabriel:
The Moar You Know
In all honesty, we will never see a return to the standard of living that characterized your childhood and young adulthood, as well as mine, Mr. Cole. The days of America being the sole global superpower are over, and we’re going to be in competition with a lot of other folks for the same resources.
In the more conventional sense, prolly around 2014. We need to still deal with what’s left of the Alt-A mortgages and the coming disaster in CRE, and then we should be out of big things to fail and can start finding new ways to build society.
Rick554
2013 when President Palin finally runs these clowns outta DC for Good!
Irony Abounds
We’re coming off of two large scale bubbles (the dot.com and housing bubbles) over the past ten years that greatly inflated growth numbers. Wages are dropping due to globalization pressures, this country is making less and less of anything of substance each year, our budget and trade deficits are expanding like Keven Federline’s waistline, and banks are not lending to anyone other than those who absolutely do not need it. So, I guess I’m a tad pessimistic about any kind of meaningful recovery in the next two or three years. Which means a Republican president in 2013, which makes me even more pessimistic. Frankly, put me in the “America’s best days are behind it” camp.
joe from Lowell
Hey, wait a minute. I thought Democrats passed that bloated American Recovery and Reinvestment Act of 2009 because it was supposed to cap unemployment at <8% in 2009Q3. What happened?
As it turned out, the Bush damage the Bush administration did to our economy was even worse than we realized, and unemployment even worse.
The ARRA brought down unemployment exactly at much as expected, but the underlying unemployment rate we were left with after 8 years of Republican rule was higher than the initial projections thought it would be.
An understandable error – it really is difficult to internalize just how much damage those people did to this country.
T. O'Hara
So, in other words, the Obama economic advisers are clueless?
Lirpa
Crimeny! Do you have to be a cranky old duffer to comment here?
Econ 101 tells us that the stock market rises about 6-9 months before main street feels it. Further, we still have to spend 70% of the ARRA money. The economy cannot help but feel positive effects from some $550 billion still to come out of the pipeline. I will not accept that Americans have suddenly become super savers – consumerism is too embedded in our national DNA and we have forever wanted more and bigger whatever.
By June 2010 the economy will be in a much better place. Whether anyone will feel better is an open question. It is as if some of the 90’s blinders have come off and we now as a nation SEE the structural problems that we have recreated since Reagan. Why not trust in our repeatedly shown ability to forget hard lessons and assume we will be blithely in the middle of our next bubble by 2012?
DougL (frmrly: Conservatively Liberal)
Fix’t.
Bill Arnold
I’m with Lirpa in feeling guarded limited optimism. Recovery will start to be noticeable mainly as a reduction in fear levels among the still-employed by spring 2010, unless there is a surprise shock to the world economy e.g. like Israel deciding that a tactical nuclear strike on Iran is in its national interest. (Or similarly a massive US conventional bombing of Iran’s nuclear sites). Recovery will not be driven by the U.S. – the Republican-controlled media (RCM?) has significantly sapped the natural optimism of America for political purposes, and we’re the epicenter of the bubble-troubles.
Unemployment will be slow to drop in part due to employers making full (and probably excessive) use of cost-control measures, such as layoffs and furloughs and shifting of jobs to lower-wage countries, to protect profits. Note that in the early 1980s recession unemployment peaked in December 2002, nearly 2 years into Reagan’s first term. (That was mostly a deliberately-inflicted recession (IIRC), but that’s perhaps not relevant.)
Savings rates will continue to be higher than in recent history for at least a decade. (Does severance pay deposited in a bank account count as “savings”?)
Moore’s Law hasn’t stopped – there are interesting technologies approaching in information technology. There might be a bubble somewhere there developing in the next few years. Alternative energy including efficiency technologies also has serious growth potential.
random asshole
I hate to be a realist, but the financial sector tends to be leading, both on the way down (their problems started before anywhere else) and on the way up (as we see now). There’s usually a 6-12 month lag between “Wall Street” and “Main Street”, though I’m not going to say that is by any means definitive or universal.
Viva BrisVegas
Most sectors of the US economy should bottom out and start heading up around Christmas.
However high levels of unemployment and underemployment are probably structural now.