Three weeks ago, economists surveyed by a leading trade association said the U.S. economy would recover from the current recession in the second quarter of next year, assuming the credit squeeze in global financial markets improved gradually.Of course three weeks ago is ancient history now, as noted in the article.
Given Monday's sell-off in the stock markets, the economists would likely be more pessimistic if they were surveyed again, said Chris Varvares, president-elect of the National Association for Business Economics, which released its quarterly survey Monday.Additional information would always influence predictions, of course.
I don't usually put a lot of stock (excuse the expression) in to what economists predict. My apologies to economists but it just doesn't seem like a very exact science.
Take the use of the word "recession" in the first quote. Now I'd be the last to argue the economy is in good shape. The word depression has be bandied about, let alone recession. But like all sciences, there are terms defined and there precise meanings to the definitions. I believe the accepted definition for recession is two consecutive quarters with negative growth. The current banking collapse is too recent to have effected two quarters.
Will we have a recession? Almost assuredly. But I have trouble trusting the predictions of people who can't be precise in their terminology. If a medical researcher said they had developed an antibiotic to affect an condition caused by a virus, you'd be skeptical of their skill in their medical field, right? Did the researcher mean a vaccination? Or was he referring to a disease caused by a bacteria?
Economic voodoo is hard enough to take seriously if the players can't stick to well-definied terms.