Politics & Policy

Contra the Recessionistas

The recession that never was seems to be over.


Hat tip to my friend Larry Kudlow, official coiner of the term “recessionistas.” What is a recessionista, you ask? When you see reporters badgering the president for not admitting that “we’re already in a recession,” you’re seeing the recessionistas. When you hear financial pundits confidently asserting — without the slightest hint of self-doubt — that we’ve entered a recession, you’re hearing the recessionistas.

The problem with the recessionistas is that for the past five years they’ve been wrong. And now, right when their recession cries were reaching fever pitch, it appears as though they’re going to be wrong again.

Monday’s data from the Institute for Supply Management is our first real glimpse at the second quarter of 2008 — you know, the one we’re in now. The above chart shows that the service sector — which is by far a better guide to the ebbs and flows of our economy than the manufacturing one — bottomed in January and has been recovering steadily ever since. It is now at an expansionary 52 percent. (Anything above 50 is positive growth territory.)

When you hear a recessionista say, “Yes, we grew in the first quarter, but since then . . . blah, blah, blah,” show them this ISM report. The service sector has only gotten stronger since the first quarter ended. The recession that never was seems to be over.


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