DUDE, WHERE’S MY RECESSION? (CONT’D): Economy rebounds in 2Q, mostly spurred by exports. “The Commerce Department reported Thursday that gross domestic product, or GDP, increased at a 3.3 percent annual rate in the April-June quarter. The revised reading was much better than the government’s initial estimate of a 1.9 percent pace and exceeded economists’ expectations for a 2.7 percent growth rate.” Not to say things are hunky-dory — I’m worried about inflation — but this doesn’t look like a recession.

DUDE, WHERE’S MY RECESSION? (CONT’D): GDP grew 1.9% last quarter. “Consumers boosted their spending at a 1.5 percent pace in the second quarter. That was up from a 0.9 percent growth rate in the first quarter and marked the best showing since the third quarter of 2007 when the economy was still performing strongly despite the severe housing slump.” On the other hand, the inflation picture isn’t so great.

DUDE, WHERE’S MY RECESSION? (CONT’D): “Federal Reserve officials marked up their outlook for inflation and economic growth in their latest projections. . . . At the June policy meeting, officials projected that the rate of economic growth by the end of the year would be between 1% and 1.6%, up from 0.3% to 1.2% in their April estimates.”

Are there economic issues, relating to high energy prices and idiotic loan portfolios? Yes. But does that constitute a recession? Nope.

UPDATE: A reader who prefers anonymity emails:

Glenn,

The looming recession is not a fabrication of the election-focussed MSM. It is real, and it is scary.

Start with the fact that since WWII there has never been negative YOY gasoline demand without a recession, understand that if hydrocarbon prices merely held at these levels, toal energy prices would continue to rise for 3 years due to the lags of utilities and pasing along input costs (natural gas and coal, which have both doubled in the past 6 months and haven’t taken even the first bites out of pocketbooks yet), and then realize these energy headwinds are childs’ play compared to the contraction of credit that will slow down all businesses’ investments. I fear your “Dude, Where’s My Recession” series trivializes the inevitable pain that has only been temporarily delayed by the massive 2Q08 fiscal stimulus package of tax rebates.

My profession as an energy analyst and portfolio manager prohiits me from being quoted in your blog (so please don’t attribute anything to me, even if you were so inclined to print my perspective) but I worry that in 6 months, there is a very high probability you will regret your cavalier attitude towards significant weakening of the underpinnings of our economy–namely consumer spending, available credit and accessible liquidity.

A future recession? Quite possibly. We’re overdue — and, of course, people who predict recession are bound to be right eventually. But a present recession — much less one over the past year — not so much. If there’s a recession next year, it won’t retroactively justify bogus claims of a recession last year.

ANOTHER UPDATE: Related thoughts from Matt Welch. My own prediction: If Obama is elected in November, the press will spend a lot of time explaining why a recession is actually a good thing for America!

MORE: Link was wrong before — fixed now. Sorry!

STILL MORE: The inflation numbers, on the other hand, don’t look so good. (Via Newsalert.).

DUDE, WHERE’S MY RECESSION? (CONT’D): Retail sales jump by largest amount in 6 months. And from the story:

Analysts were surprised by the solid increase in retail sales and noted that sales in April were also revised to show a respectable gain of 0.4 percent, instead of the original estimate that sales had fallen by 0.2 percent.

“Recession? What recession?” asked Joel Naroff, chief economist at Naroff Economic Advisors. “Spending in April and May was solid in just about every category.”

Do we face possibly serious economic problems? Quite possibly. Are we in a recession now, as media folks keep claiming? It doesn’t look like it. On the other hand, Megan McArdle observes: “The rise is less impressive if you exclude gasoline.”

UPDATE: Reader George Zachar emails that “even without gasoline, sales were strong.” It does look that way.

DUDE, WHERE’S MY RECESSION? A followup post on the economy from Fabius Maximus.

FABIUS MAXIMUS IS CRITICAL, in a thoughtful enough way, of the “Dude, where’s my recession?” line.

But I’ve already addressed the point two months ago. Are we in a recession? Possibly — it’s unknowable until the data come in. But that’s always true, since calling a recession is a retrospective act, and the media coverage — which is what I’m critiquing, remember — is all couched in terms that suggest that the data clearly indicate that we’re in a recession right now, or something more like the Great Depression, when that’s not what the data we have indicate so far. Meanwhile, contrary to his assertion, my posts aren’t just anecdotal, but point to data. As I’ve noted before, I can’t call the economy better than experts — who themselves can’t call the economy very well — but I can spot a media bulldozing operation when I see one, and I see one now.

That said, this is good advice: “Build savings. Be careful when starting new projects or switching jobs. Carefully watch the risk in their households’ balance sheets.” But, then, it’s always good advice, to be followed in good times and bad, regardless of what’s on the news. If you rely on media reports to set your household financial strategy, you’ll have the financial equivalent of bipolar disorder.

On the other hand — and here’s the really valuable part of his cautioning — as I’ve noted before, the mere fact that the media are pushing a problem with bogus claims doesn’t mean that there’s not a real problem somewhere. It’s easy to forget that, amid the fun of bursting their bubbles.

UPDATE: Well here’s an unemployment jump in the latest figures. To 5.5%. If it establishes a trend that would be bad. Scroll past the copious gloomy adjectives and you get this, though: “The 5.5 percent rate is relatively moderate judged by historical standards. Yet, there was no question that employers last month sharply cut jobs in manufacturing, construction, retailing and professional and businesses services. Those losses swamped gains elsewhere, including in the education and health fields, government, and leisure and hospitality.” What does it mean? I don’t know. Neither do they — but they’ll tell you they do.

ANOTHER UPDATE: Reader Chris Baldwin emails: “While the tag line is somewhat recent, it is disingenuous to claim that this is all about Q1 and Q2 data. We’ve been told that we’re already *in* a recession for going on a full year now, when it is clearly nonsense. He’s right when he says that we might be in a recession in Q2, but we weren’t 10 months ago when all this doom mongering really kicked into high gear.”

DUDE, WHERE’S MY RECESSION? (CONT’D): “Given that the economy is flagging, this would seem an inauspicious time to be graduating from college and looking for full-time employment. Job prospects this year, however, have been better than career counselors and recent graduates had expected. . . . Preliminary surveys conducted by university and college career counselors indicate that the percentage of students who had found jobs by graduation was about the same as last year.” Okay, it’s not all rosy, but it’s not exactly the economic wasteland we’ve been hearing about.

DUDE, WHERE’S MY RECESSION? (CONT’D): Jon Henke looks at economics and politics.

DUDE, WHERE’S MY RECESSION? (CONT’D): “The new reading on gross domestic product, released by the Commerce Department on Thursday, was an improvement from the government’s initial growth estimate for the January-to-March quarter as well as the economy’s performance in the final quarter of last year. . . . The first-quarter performance matched analysts’ forecasts and offered a somewhat encouraging sign because it showed the economy was still growing at that time. The figure didn’t meet a definition of recession, which under a rough rule is two straight quarters of shrinking GDP.”

DUDE, WHERE’S MY RECESSION? (CONT’D): U.S. Initial Jobless Claims Unexpectedly Decline.

DUDE, WHERE’S MY RECESSION? Well, if Playboy is in trouble, maybe there really is a recession underway. . . . or maybe it’s just Internet competition.

DUDE, WHERE’S MY RECESSION? (CONT’D): “U.S. unemployment lines got shorter last week, as the number of people filing for the first time for unemployment benefits fell by 18,000 to 365,000 on a seasonally adjusted basis in the week ended May 3, the Labor Department reported Thursday.” Somewhat related item here.

UPDATE: In my backyard? This is more a problem of overspending — we were running huge surpluses a couple of years ago, and the state budgeted up to them instead of socking the money away as some suggested — than of recession. Unemployment in Knox County, where I live, is at just over 4%. Also, I think we’re starting to see the usual budgetary posturing used by second-term governors in Tennessee who want a state income tax. We had the same thing under Gov. Don Sundquist.

[LATER: “Backyard” link above was wrong before. Fixed now. Sorry!]

DUDE, WHERE’S MY RECESSION? (CONT’D): Chicken Little Alert, or how to make good news sound like bad news.

DUDE, WHERE’S MY RECESSION? (CONT’D): Jobless Rate Falls; AP, Economists Baffled.

DUDE, WHERE’S MY RECESSION? (CONT’D) I don’t think it’s online anywhere, but I just got my latest Aviation Week and here’s a report that suggests things aren’t too slow:

G650 Customers Wait in Line

Gulfstream’s planned output of 83 G650 business jets in the first 2.5 years of production is oversubscribed by a factor of six to seven, says parent company General Dynamics. Gulfstream began accepting $500,000 refundable deposits on the new $58.5 million ultra-long-range jet on April 15, signing time-stamped letters of intent with customers that it is now working through to convert to orders.

Seems like this is one of the first places a business could cut back. Am I wrong?

UPDATE: Maybe. A reader emails:

The G-650 is an awesome airplane, and it fits a market niche that currently has no competition. In re:
recession, the Gulfstream customer generally doesn’t worry too much about recessions, so I’m not sure if it’s a good indicator. I don’t imagine Ferrari is feeling much of the pinch of any recession either.

One thing to mention though, the G-650 will have a lower carbon impact than any other large corporate jet. Maybe we can sign Al Gore up for one!

I can’t speak for Al, but if Gulfstream wants to lend me one, I promise to blog evenhandedly about the experience. I could use a lift for my next dive trip!

UPDATE: The full story is online now. Thanks, AvWeek!

JAMES PETHOKOUKIS: Dude, where’s my recession?

STEPHEN MILLER: Kamala Harris ran the Fyre Festival of campaigns.

As it turns out, not all of those celebrity “activists” appeared with Kamala Harris because they believed in her or were doing their civic duty by getting engaged. They charged fees — and some were astronomical. Harris made elaborate promises to her crowds about celebrity performances. Crowds were brought in with the promise of seeing Beyoncé perform, only to leave disappointed. It was all a financial ruse, much like the infamous Fyre Festival of 2017. For the uninitiated, Fyre Festival was sold as a high-end island music festival and was promoted on Instagram by celebrities such as Kendall Jenner and Bella Hadid. Attendees were promised luxurious accommodations, airline transportation to and from the island and expensive food and alcohol. What followed, however, was mass confusion, unfulfilled promises, stranded and hungry people and vendors left unpaid. The lead promoter went to prison on fraud charges.

As it turns out, the Harris campaign wasn’t run much differently. As reported in the Washington Examiner, the Harris campaign spent upwards of six figures to build a custom set for her appearance on the Call Me Daddy podcast, which only netted about 800,000 downloads. Meanwhile, Donald Trump appeared on Joe Rogan’s podcast — and his interview has got more than 47 million views on YouTube.

There were seven swing-state concerts that involved high-priced performers — Katy Perry, Lady Gaga, Jon Bon Jovi, Ricky Martin and more — who seemingly ended up costing the Harris campaign more than $20 million on event production alone, and reportedly even more on paying the celebrities to appear. Even Oprah Winfrey charged the campaign $1 million to show up. The campaign went so far into debt that the campaign was reportedly forced to scrap Canadian Nineties indie-pop singer Alanis Morissette to save money. The pop concert campaign strategy is said to have been the brainchild of former Obama advisors on the campaign.

You can do rock concerts as a campaign strategy when your candidate has rock star chops, of the level that (the composite character of) Barack Obama had on the stump during his 2008 campaign. But Kamala’s campaign was a textbook example of what happens when a bunch of Obama advisors go to work for a candidate who isn’t him and attempt to run the same playbook.

Obama also benefited from a very different news cycle: until the massive subprime mortgage meltdown tanked the stock market on September 29, 2008, the economy wasn’t an ongoing horror story in the news; inflation was under control, unemployment was low in the first half of the year, and on the surface, the stock market was performing relatively well (until it wasn’t). A recurring headline in the summer of 2008 at Instapundit was “Dude, where’s my recession?” It eventually arrived — and how — but until it did, Obama campaigned in a much more forgiving environment among potential voters, before Milton Friedman wasn’t running the show anymore, to only slightly paraphrase the unintentional warning by Joe Biden in 2019 on what he was about to unleash on the unsuspecting American middle class.

DUDE, WHERE’S MY RECESSION (CONT’D): James Pethokoukis — who actually coined the “Dude, where’s my recession?” line — observes:

What do you call a recession where the economy keeps going up and up, even if a bit sluggishly? Well, my friends, you call that an expansion. And that is what we seem to have right now, despite all the economic doomsaying about a recession or even a Great Depression 2.0. Today, the Commerce Department revised its first-quarter estimate of gross domestic product upward to 0.9 percent from 0.6 percent. That follows 0.6 percent GDP growth in the final quarter of 2007. The revision also makes it more likely that the second quarter will be positive, maybe 1.5 percent, maybe even higher.

Now I went back and checked the numbers for the past 50 years and didn’t find a single case of a recession—as calculated by the National Bureau of Economic Research—that started with or contained two straight quarters of positive GDP growth, much less three quarters.

It may not be the best economy in living memory, but it’s not all that bad, either.