Factoring Blog - For Small Businesses

If it’s a recession, it could be a short one. And we may avert a recession altogether.

Those are not my predictions. They are comments published in light of the most recent economic data from April, that is just now being reported.

For instance, this report published in the New York Times, quotes the chief economist of Eaton Vance:

United States retail sales weakened modestly in April, but outside the hard-pressed auto sector they were more resilient than many economists had forecast, a government report showed on Tuesday.

The report echoed recent data showing underlying economic durability, including fewer job losses in April than feared and a surprisingly strong pace of first-quarter productivity.

The Commerce Department said overall retail sales declined 0.2 percent, but if cars were excluded, sales rose 0.5 percent. Economists expected total sales to slip 0.1 percent, but had forecast a gain of just 0.2 percent excluding autos.

“I think it’s a report that tells you the economy is very weak, but if we are in a recession it’s going to be a real short one,” said Robert B. MacIntosh, chief economist at Eaton Vance in Boston.

And then there’s this report, from BusinessWeek, suggesting that recession may be avoided altogether:

Recession is still very much a matter of opinion, not a matter of fact. Some economists are even taking at least a half-step back from their previous beliefs that a downturn is all but inevitable. So far, most of the economic data outside of homebuilding and house prices have not met the recession forecasters’ downbeat expectations. Businesses are reining in their capital spending, but not dramatically. Employment losses have not matched the size of those in past recessions. And even consumer spending through April, at least outside of flagging auto sales, is holding up far better than expected.

So, are they right? I don’t know. But I do know that things don’t seem to feel as bad. I’m not sure how to describe it, other than the fact that what’s happening in the economy right now feels slow, but not dismal.

This entry was posted on Thursday, May 15th, 2008 at 10:56 pm and is filed under Economic News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.