The Seven Percent Solution


Nationally, 34% of adults believe that the U.S. is currently in recession. That’s compared to 41% who don’t think the U.S. is in recession and a quarter (25%) who are not sure.

Wow. There is only a 7% difference between the number of respondents who believe the economy is not in a recession and those who believe it is.

Not much confidence there.

2 thoughts on “The Seven Percent Solution

  1. the minute gas prices go up, people think the economy is in a recession. fact is, poor Q1 performance was more because of a base effect than anything else. Q1 2006 saw GDP of 5.6% (the country was starting to recover and get back to normal after Katrina and Rita) – so, of course comparative growth is going to come out lower. BUT, strictly speaking, bad growth is not negative growth – and a recession is definied as negative growth for not just 1 but 2 quarters.
    the good news is that the fundamentals are there – companies are showing strong profits and exports are starting to increase thanks to a weaker USD. additional good news from this week’s beige book is that companies are hiring and factory orders are up and commercial real estate is picking up some of the residential real estate slack.
    the bad news is that it wages are staying low despite low unemployment. the worse news is that, as 10-year yields rise, you can expect rates on ARMs to increase, as well, as more people are starting to roll off their 3-year-fixed rates. delinquencies will rise, but, as long as unemployment stays low, the number of foreclosures won’t be too bad.
    on the whole, the economy is going to continue to expand this year – slowly, but expand nonetheless – and the US isn’t going to swoon as badly as was anticipated at the beginning of the year, thanks to strong global growth.
    3 guesses what I do for a living. the first 2 don’t count.

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