Do You (Technically) Feel Better?
“From a technical perspective, the recession is very likely over,” Ben Bernanke assured the world after a speech at the Brookings Institute yesterday. If you’ll spare us a few seconds, we’d like to start today’s news with a semantic gripe:
Is there any point in saying something is “technical” unless you’re just trying to put a pretty mask on an ugly reality? When our mechanic told us last month that the brake pads on our old Honda Civic were “technically” usable, we grimaced and reached for our wallet. Picture an anxious young couple in the doctor’s office post examination when their trusted physician announces, “Well, technically, you’re pregnant.” Mmmmm… how assuring.
So the economy is technically just fine, but “it’s still going to feel like a very weak economy for some time,” Mr. Bernanke hesitantly added, “as many people will still find that their job security and their employment status is not what they wish it was.”
In Bernanke-speak summary: Technical economy = what you wish it was. Real economy = not what you wish it was.
Here’s another serious indicator that the powers that be will soon be declaring an end to this recession: Capacity utilization inched up for the second month in a row in August. In data announced by the Fed today (now way Mr. Bernanke got a peak at this beforehand), the U.S. manufacturing sector utilized 69.6% of total capacity during August, its highest level since February.
We’ve noted this several times before, but it bears repeating. In postwar history, when capacity utilization rebounds, the technical conclusion of the recession has already occurred… just a matter of time before the NBER calls it:
So we wonder… how long until the next one technically begins?