The recession began Q4, 2007, end in sight?

Posted by Tim

July 31, 2008

U.S. economy contracted in fourth quarter - MarketWatch.

Revised figures show the U.S. economy had negative growth in the 4th quarter of 2007, signaling the start of a recession. If this is the case we are now into the 4th quarter since the start of the recession and approaching the average 10 month post WWII recession length. Note: the longest recession of the modern era is 16 months (twice).

Growth in the 1st quarter of 2008 was 0.9% and the second quarter is now quoted at 1.9% growth. It seems the U.S. economy is clawing out of the lows of late 2007 and early 2008. Let us see if the 2nd half of 2008 show enough growth to signal the recession’s end.

It appears this will be a modest pull back by historical standards but the pschological impact has hit the national psyche very hard. I think this recession has been rooted in the housing pull back which literally hits people where they live. Also, the current nature of the Internet feeds into the fears and negativity of many.

At this point both the stock and housing markets will be well on their way to recovery by the time many of the “it’s different this time” crowd give up on their pessimism. But isn’t is always so?