Profile of a (maybe) recession
Some analysts think the slowdown may be confined largely to the housing market.
from the May 28, 2008 edition
Page 2 of 3
|
This feature requires a newer version of Macromedia Flash Player and javascript-enabled browser.
|
Reporter Mark Trumbull discusses the difficulties in assessing a recession.
The crunch doesn't affect everyone equally. Some families are hard-hit by mortgage rate resets for example, while millions of others are renters or people who own homes without a mortgage.
But housing troubles could make it hard for consumers overall to spend a lot more, even if they don't dramatically cut spending.
Hence the uncertainty: Will this even end up as a recession?
A panel of economists is watching what happens now, and will ultimately have to make that call.
Members of the panel caution against reading too much into the fact that GDP didn't turn negative in the preliminary first-quarter numbers released at the end of April.
"Employment is falling," says Jeffrey Frankel, one of seven members of the business cycle dating committee, an arm of the private National Bureau of Economic Research.
It may be that a recession has simply been postponed, not avoided, he says.
Mr. Frankel, a Harvard University economist, notes that the housing slump is one of several forces buffeting consumers.
Other negatives:
•Energy and food prices have soared.
•Bank credit conditions are tightening.
RSS feed
){kind=link}
){kind=link}