08/14/09 Baltimore, Maryland
Is this leg of the Great Recession over? Or has the government duped us yet again?
Capacity utilization inched up a few tenths of a percent in July, the Fed proclaimed today. American companies utilized 68.5% of their productive potential, up from June’s record low of 68.1%. We have a particular affinity for this D-list data point…aside from measuring our collective utility, it’s a worthy economic indicator:
So is this it? Despite so many other feelings to the contrary, is the recession (as we know it) over?
The reason behind capacity utilization’s meager rise provides the best answer: July’s improvement was driven entirely by auto manufacturers coming back to life. They had to bump up production 20.1% to keep up with the initial response to “cash for clunkers.”
Even though it’s not legit, we wouldn’t be surprised if we are at or near the technical end of this recession. Between all the government stimuli and manipulation, the political pressure on the current administration to “do something,” this massive bear market stock rally and Uncle Sam’s inclination to fudge economic data…would you really be surprised if this thing ends in theory long before it’s over in practice?
Of course, the National Bureau of Economic Research (NBER) will be of no help. Having no interest in real-time forecasting, they won’t officially call an end to this recession until it’s long past. It took until December 2008 to tell us that this whole mess started in December 2007. Heh…by the time the NBER calls an end to this one, we might have begun another.
Ian Mathias
Ian Mathias is the managing editor of Agora Financial’s Income Franchise, where he writes and researches about retirement, dividend and fixed income investing. Much of his work is featured in The Daily Reckoning and Lifetime Income Report – Agora Financial’s flagship income investing advisory.
Previously, Ian managed The 5 Min. Forecast, a fun, fast-paced daily look into the future of global markets and macroeconomics. He’s also worked in public relations, where media outlets like Forbes, AP, Yahoo! and MSN Money have syndicated his writing. If he’s not at work, you’ll probably find Ian on a bicycle, racing up and down the “mountains” of Baltimore County. Ian has a BA from Loyola University in Maryland.
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it ain’t over till it’s over and it ain’t over….
what is the feauture of IT job market
If the recession is over, I’m not feeling it. lol. Nobody is hiring, Small business funding is down to a trickle, foreclosures still happening, even manual labor jobs are competitive.
THE RECESSION IS NOT OVER. GIVE UP THE MONEY, FUND SMALL BUSINESS, REMOVE STRINGENT GUIDELINES ON BANK LOANS. BANKS, WHERE’S ALL THAT GOV. SURPLUS FUNDING ?