Its not officially a Recession Yet
It takes two quarters of negative growth to officially make a recession. The first quarter of the year, which many people expected would be the first quarter of negative growth just barely managed to eek out 0.6% of growth if Commerce Department numbers are to be believed. (In past years they have often updated their numbers when more accurate information came in, so this possible good news could be a calculation error or bad data.) That said if the information is correct, then this last quarter was not the official start of the 2008 recession.
The American economy remained stuck in the slow lane over the first three months of the year, expanding by a modest 0.6 percent annualized rate, the Commerce Department announced Wednesday morning.
The impossibly weak US dollar pushed exports abroad as other countries picked up our goods and services at a bargain. That’s not something that is likely to last as the cost to produce products increases, those prices to export will have to go up and end the arbitrage. Its even more likely that some of these exports were short lived at best as the US manufactures less and less products all the times from automobiles to ram to textiles. Now the big question is what will the Federal Reserve do? They are expected to signal their next move in about 90 minutes, which could help the anemic growth continue or could push us head on into a recession.
