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Recovery Indicators Relapse

The recovery indicators slipped as fears of a double-

By Dr. Joe Webb
Published: August 3, 2011

The recovery indicators slipped as fears of a double-dip recession became more prevalent in recent weeks. Two of our indicators are now below their levels at the recession start. Both of the indicators were from this week's Institute for Supply Management non-manufacturing report. There was additional weakness in the ISM manufacturing new orders, as they went to levels indicating contraction since last month, but they remain at a level higher than those at the recession start. Both the NASDAQ composite and proprietors' income remain ahead of their recession start levels, but only in current dollars. The NASDAQ slipped -5% in the last month, and is +1.2% ahead of the December 2007 level. Once inflation is accounted for, however, the NASDAQ is down -5.8% and proprietors' income is down -5.6%. (Click chart to enlarge). Will there be a double dip? No, there won't be, by definition. The recession, which is the last high point of the economy, December 2007, ended when it reached its low point in June 2009. This means that any new downturn would be considered a separate recession. The most important upcoming economic report is the unemployment report, released on Friday, August 5. The ISM reports, the ADP employment report (+114,000), and the Challenger Gray layoff report (-66,414) implied that the official unemployment report would be the same as last month, or slightly worse, and unlikely to be better. Stay tuned.

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink's Economics and Research Center.



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