Tuesday, June 28, 2011

At What Point Does a Double Dip Become Just Another Recession?

by Bespoke Investment Group

With all the pundits out there calling for a double-dip, it may sound hard to believe that the current expansion is now approaching its two-year anniversary. While recent economic data may be showing some weakness, we would note that Q2 GDP is still forecast to show growth (2.3%) and the ISM Manufacturing and Non-Manufacturing indices are still above 50, which is the boundary for growth vs. contraction. 

Even if the month of June were to mark the end of this current expansion and the economy did go into a recession (a view we do not share), it would still make this expansion as long or longer than 8 out of the 22 (36%) prior expansions since 1900. We realize it is just a matter of semantics, but at what point does it become just another recession rather than a double dip? Or do those calling for a 'double dip' just use that term to evoke the painful memories of the last recession?




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