Dude, Where’s My Recession?

Kurt Brouwer June 12th, 2008

James Pethokoukis at the Capital Commerce blog coined this tongue-in-cheek phrase — Dude, Where’s My Recession? — and it has been picked up elsewhere in the blogosphere. He posts under this title when surprisingly positive economic news comes out.

This phrase pokes fun of all the politicians, pundits and press people who have been bemoaning the ‘recession’ for many months now. That’s not to suggest that the economy is booming, but that reports of its demise are premature. His latest post on this topic points to the surprising surge in retail sales [emphasis added]:

Dude, Where’s My Recession?: The Series (U.S. News/Capital Commerce Blog, June 12, 2008, James Pethokoukis)

As the saying goes, “Facts are stubborn things.”

  1. Retail sales increased 1 percent in May. The consensus forecast was plus 0.5 percent.

  2. Retail sales excluding autos increased 1.2 percent. The consensus was 0.7 percent.

  3. Sales were also revised, up substantially for March and April.

So tell me, Brian Wesbury and Bob Stein over at First Trust Advisors, what’s it all mean?

Today’s report is the final nail in the coffin for the theory that the U.S. is in a consumer-led recession. Total retail sales are up at an 8% annual rate in the past three months while “core” retail sales are up at a 10.2% rate. It is impossible to be in a consumer-led recession when retail sales are growing so rapidly. Some analysts will attribute the strength in sales to the tax rebate checks that started being sent at the very end of April. However, sales were revised, up substantially for March and April, and core sales (excluding autos, building materials, and gas) in March and April were about as strong as in May, suggesting the rise in consumption is based on fundamentals, not government checks. Today’s report creates considerable upside risk to our forecast of a 1.5% real GDP growth rate for the second quarter of 2008…

For more on this topic, see The Strangest Recession in Economic History and U.S. Economy — Still Growing After All These Fears.

Did you enjoy this article?

Trackback URI | Comments RSS

Leave a Reply