Friday, July 13, 2018

Looking back 9 Years Ago: The Sluggish Recovery Began

by Bill McBride on 7/13/2018 01:03:00 PM

Note: This is the 14th year I've been writing this blog.  Sometimes it is fun to look back, especially at turning points.  Starting in January 2005, I was very bearish on housing - and in early 2007, I predicted a recession.

However in 2009 I became more optimistic. For example, in February 2009, I wrote: Looking for the Sun (Note: that post shocked many readers since I had been very bearish).

And here are a couple of posts I wrote almost exactly 9 years ago on July 15, 2009:

Is the Recession Over?

Show me the Engines of Growth

Back in February I pointed out that I expected to see some economic rays of sunshine this year. But I never expected an immaculate recovery forecast from the FOMC.

Although I've argued repeatedly that a "Great Depression 2" was extremely unlikely, I think the other extreme - an immaculate recovery - is also unlikely.
I also noted - because the recovery would be sluggish, and jobless at first - that I'd expect the NBER to wait some time before dating the recession. The NBER finally dated the end of the recession in September 2010:
CAMBRIDGE September 20, 2010 - The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II.
Along the way, in February 2012, I called the bottom for housing: The Housing Bottom is Here

Currently I'm still mostly positive on the economy. Of course I'm concerned about policy, as I noted earlier this year: When the Story Changes, Be Alert

So I'm currently more concerned, but I'm still not on recession watch. For example this week I wrote Investment and Recessions concluding "there is no recession in sight".