While reading the New York Times’s article on the April job loss figures (we only lost 20,000 instead of an expected 80,000), I had to scratch my head. Why? Well, let me show you. Here’s the opening paragraph:

The American economy shed 20,000 jobs in April, the Labor Department said on Friday in a report that many economists took as powerful evidence that the United States is ensnared in a recession.

You’d think that these figures spelled doomsday for the economy. Let’s prep for Armageddon! But then I read the next paragraph:

But the size of the loss was significantly smaller than many analysts predicted, and the unemployment rate nudged down to 5 percent.

Significantly smaller? 5% unemployment? Those don’t sound bad at all!

It seems as if the news media and the blogosphere are split on what’s going to happen next (and the NYT can’t decide what it thinks). Is the market going to recover and avoid outright recession? Or are we going to drop to deeper lows?

Here’s some of the debate I’ve found on the internet about the subject:

• President Bush, in press conference with reporters last Friday, stated that “This economy is going to come on. I’m confident it will.” Of course he’s not going to put down the economy, but Lawrence Kudlow makes a logical case that Bush will have the last laugh and that we will avoid recession.
• The Motley Fool seems to think that that we’re still headed for recession, despite the positive gain in GDP last quarter. It’s just going to take longer and developer more slowly. Interesting question they pose: Does that mean it will take longer to get out of it?
• Surjit Bhalla writes in the Business Standard that the recession talk is hype and that the actions of Fed Chairman Ben Bernanke averted a financial meltdown.
• Small Business Trends believes that inflation, not recession, is the looming economic monster.

There’s a lot to debate, so I ask you: what do you think? What’s next: Recession, economic recovery, or inflation?

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This entry was posted on Monday, May 5th, 2008 at 4:00 pm and is filed under News and Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.