What should be most striking about these concerns, however, is how little they matter. A double dip is a period of economic contraction that follows a brief recovery after a recession. It’s a useful prop for framing economic and political debates but doesn’t describe what’s actually happening across the country. The reality is that if you are doing well in this economy, either as a company or an individual, you will continue to do well regardless of a statistical double dip. If you are doing badly, you will continue to struggle whether or not the economic data are improving. (See 10 big recession surprises.)
GDP has been expanding since the third quarter of last year, graced by government spending and a steady though diminished level of domestic consumption. But as we all know, that growth — 5.6% in the fourth quarter of last year and 2.7% in the first quarter of this year — has been accompanied by high unemployment and little job creation. In short, this has been an economic recovery that has felt like a continued recession.
That’s because for a significant portion of the population, it is a continued recession. Not only is the real unemployment rate (combining workers who have dropped out of the workforce and the headline numbers, together with workers classified as marginally attached to the workforce) in the midteens, but the amount of hours worked has declined, as have many incomes. If you combine that with the scarcity of consumer credit and the uncertainty about the social safety net, tens of millions of Americans are facing a grave economic future. Particularly for men who lack a college education and were or are in an industry that depends on manual labor (construction and manufacturing above all), this is a perilous time.
Though global equities have rallied modestly after a sharp plunge in May and June and companies have announced strong earnings, sentiment about the future remains gloomy. In response to intense concerns about a looming double-dip recession, business leaders have complained to White House officials that government policy is inhibiting job creation and that uncertainty about new regulations is discouraging them from investing their $1.8 trillion in accumulated corporate cash. On the flip side, Democrats in Congress effectively cornered the Republicans to extend unemployment benefits yet again, a direct response to the undeniable fact that the unemployed are facing a severe challenge to find work. Leer más “A Double Dip Recession? Who Cares?”