Experts Disagree Over Recession Predictions, Is Another One Coming?

Depending on How You Examine the Statistics, the Future May Be Exciting or Dreadful

by Adam Hilliard on September 30, 2011

September 30^th is the final day of the third quarter of 2011. With the close of this quarter, many economists are attempting to translate new data into a prediction on the fate of the US economy. The biggest question to answer is, “Are we on the verge of another recession?” Experts disagree.

According to the Department of Labor, the amount of people applying for unemployment benefits dropped to its lowest amount since April. The loss of jobs may be part of the reason that the US economy grew at a slightly higher rate than expected. However, other reports that the US added no new jobs in August, so it looks like lay offs may not be as prevalent, but new hiring is not on the rise either.

With so many, nearly contradicting statistics, it is extremely difficult to make a decision as to the future of the economy. In general, though, most economists predict that the United States will avoid another recession. A recession is technically defined as two consecutive quarters of negative growth.

According to Boeing’s chief executive Jim McNerney, “While we still see strong business fundamentals in America, the quarterly survey results reflect increased uncertainty among CEOs concerning the economic climate and business environment.”

Chris Rupkey, the chief financial economist at the Bank of Tokyo-Mitsubishi agrees, saying, “The economy is not teetering on the edge of a cliff, getting ready to fall over into a recession.”

Others are not so sure. The Economic Cycle Research Institute has released profoundly negative economic forecast. According to ECRI managing director Lakshman Achuthan, “”It’s either just begun, or it’s right in front of us. But at this point that’s a detail. The critical news is there’s no turning back. We are going to have a new recession.”

Achuthan, though not following the most technical definition of the term, says that the recession may have started during the third quarter, when economic growth was lower than predicted. With the possibility of an expanding debt crisis in Europe and other sudden economic problems, he says it is unlikely the country will be able to avoid a new recession.

For many, this news will be met with a cynical, “When did the old recession end?” Achuthan has an answer which may not cheer you up, “The reason some people feel like the previous recession never ended is no mystery; the jobs that were lost have not been recovered. But we’ve added more than 1 million jobs in the last year, which only happens if we’re in a recovery. If you think this is a bad economy, you haven’t seen anything yet.”

Dedicated to protecting consumer privacy and furthering consumer education since 1997, CashAdvance.com ensures the most convenient, reliable and hassle-free payday loan experience possible. Over a million consumers have received cash advance loans from America’s Cash Advance Network.