USA exits recession

Index Apr10.pngThe IeC Boom/Gloom Index (blue column) moved up sharply last month, as Western stock markets rallied further on news that the major economies were now officially exiting recession.

Various definitions exist of recession, with most countries referencing 2 consecutive quarters of negative GDP. The USA measures recessions differently, but the head of the official Business Cycle Dating Committee said Friday that it was “pretty clear”, based on the employment figures, that the recession had ended.

Of course, the resumption of economic growth is not always the same as full recovery – as the blog learnt in the major downturns of the early 1980’s and 1990’s. It shares the view of the Governor of the Bank of England, that “its not the growth rates, its the levels that matter here“. On this basis, the earliest date that global GDP might recover in real terms (adjusting for inflation) back to 2008’s $58.93trn level is probably 2011.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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