Double Dip In Gdp Figures Not Necessary

[luigi]

The term double dip is being used frequently of late, sometimes with reference to the GDP figures, sometimes with reference to the housing indices.

The question is can the one happen without the other?

Discuss.

My understanding is that the housing market lags the jobs market which in turn lags the GDP figures. So the recession can be over long before unemployment peaks and years before the property market bottoms out.

It's also true that even once the economy pulls out of a technical recession and starts to grow it takes a few years to breach the peak of boom output figures again, hence the reason for the lag in re-employment.

Any more thoughts?

[Neptune]

The term double dip is being used frequently of late, sometimes with reference to the GDP figures, sometimes with reference to the housing indices.

The question is can the one happen without the other?

Discuss.

My understanding is that the housing market lags the jobs market which in turn lags the GDP figures. So the recession can be over long before unemployment peaks and years before the property market bottoms out.

It's also true that even once the economy pulls out of a technical recession and starts to grow it takes a few years to breach the peak of boom output figures again, hence the reason for the lag in re-employment.

Any more thoughts?

Opposite way around.

Previous data shows that the bust is pre-empted by the falling housing market. The jobs market lags the economy. The economy lags the housing market.

This time around its such a cluster f*ck its hard to tell whats happening out there.

Although the first public signs of anything going wrong was the mortgage company Northern Rock going tits up.

And of course in America it was the subprime thing that nailed their economy.

[the flying pig]

i dunno... [un]employment is widely known as a classic lagging indicator but i wonder if the debt bubble may have broken any easily recognisable link there ever was between pwoperdee and GDP... it's not as if a few quarters of growth will jump us straight back to 2006/07 lending standards, or anywhere near to them... and the credit boom wasn't itself precipitated by a particularly large amt of growth in the real economy... pwoperdee just became detached, a law unto itself, and may remain so for quite a while IMO...

[interestrateripoff]

The GDP indicator is flawed on so many levels, unemployment isn't a lagging indicator it's just that GDP growth needs to be at a certain level to create job growth. So the statists call an end to the recession because GDP is positive but really it's not strong enough to create job growth, hence unemployment lags. I think the US needs around 3% growth to create jobs. Until that's reached you will still have the unemployment lines growing slowly.

I've seen that the UK needs around 2% growth just to stop job losses and hold the economy steady.

So when you get 0.5% growth the recession is over but in reality it's not.

[Tired of Waiting]

The term double dip is being used frequently of late, sometimes with reference to the GDP figures, sometimes with reference to the housing indices.

The question is can the one happen without the other?

Discuss.

My understanding is that the housing market lags the jobs market which in turn lags the GDP figures. So the recession can be over long before unemployment peaks and years before the property market bottoms out.

It's also true that even once the economy pulls out of a technical recession and starts to grow it takes a few years to breach the peak of boom output figures again, hence the reason for the lag in re-employment.

Any more thoughts?

I think that will depend on the government managing to restrict credit to the housing market (via FSA regulation, or more "discrete" agreements), channelling this credit to business instead (and at low interest rates). That would grown the economy, but correct housing prices.

.

Edited September 1, 2010 by Tired of Waiting