Tuesday, May 10, 2011

Buffett Was Right About the Economy -- Again

This is an article geared toward investing but it talks about the overall economy as well. The message is that manufacturing is growing, fueled by the rebound of domestic car companies and that several commodities futures were dropping somewhat which should further help manufacturing by cutting input costs.

This was a short article but it made me think of a few questions related to my last post "If you have the answers tell me" How will we know we are out of the recession? Is it a composite of statistics like in this article, various sectors growing, GDP etc. Is it just a general consensus with increased consumer confidence? Is it the stock market reaching new peaks?

This just made me consider our measurement systems and how we classify different economic climates.
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2 comments:

  1. BethMay 10, 2011 at 3:36 PM

    Well, recession.org presents some pretty good information on recessions. (http://recession.org/definition) According to the site, most experts in the U.S. define a recession after "GDP growth is negative for a period of two or more consecutive quarters."

    Further, "The agency that is officially in charge of declaring a recession in the United States is known as the National Bureau of Economic Research, or NBER. The NBER define’s a recession as a “significant decline in economic activity lasting more than a few months.”"

    While of course many factors like unemployment and interest rates play into it, the globally accepted definition seems to be based on GPD, though not only on GDP.

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  2. RichardMay 12, 2011 at 5:32 AM

    According to the NBER, we have been out of recession since late 2009. Is it me, or do they live in a cave somewhere?

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