Why do we read, hear and see talking heads talk about the coming ‘double dip' recession when so many claim the opposite? Do you think that those who state a double-dip is on the horizon may benefit by claiming there is one coming, or am I way too cynical?
Either way, yet another report has said a double-dip will not happen. According to TD Economics' Deputy Chief Economist Beata Caranci and Senior Economist James Marple in the latest TD Economics' U.S. Quarterly Economic Forecast report, “We don't expect to see any miracles occurring over the next several months…but the evidence appears to be for the gradual unwind of imbalances and a continued slow pick-up in economic activity – and not another descent into recession.”
Noting that bad economic news tends to make headlines, the authors highlight the positive economic developments of recent months and present a case for guarded optimism with respect to the economy's nascent recovery. Private domestic demand – the key ingredient to a sustained expansion – has seen a strong burst of activity of late, fueled by a 17.6 percent annualized increase in business investment. This would not have been possible without some thawing of credit markets. Signs that credit conditions are easing, especially for small businesses, are encouraging, as they suggest that monetary stimulus is getting through to the real economy.
“While there is a case for optimism, what we really strive for is realism, and it is true that the bears of this world have not had major difficulty finding reasons to be negative,” the authors write.