Is Europe's Recession Really Over? 159
jones_supa writes "Bloomberg, the WSJ and the NYT cheered to report that the Euro Zone's economy has showed signs of recovery after two years of decline. They're all based on the news that Eurostat, the keeper of economic statistics for the European Union, says GDP grew 0.3 percent within the EU's borders from the end of March through June. As Olli Rehn, Eurostat's vice president, writes on his blog: 'I hope there will be no premature, self-congratulatory statements suggesting "the crisis is over."' He calls the GDP report only another sign of 'a potential turning point in the EU economy.' The quick conclusion by some economists and some in the news media that a slight rise in one quarter's GDP means a recession is over ignores how experts figure out when an economy is either in a significant downturn (a recession) or enjoying steady growth (an expansion)."
Betteridge is actually wrong this time (Score:4, Informative)
A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.
Which doesn't mean it can't come back later.
it's not really an integrated economy yet (Score:5, Informative)
The EU is getting more integrated, but is still nowhere near one economy that moves in unison. So the answer to the headline question is: yes in some places, no in others. Germany's GDP is growing; Spain's is shrinking.
Re:Measures of uncertainty (Score:5, Informative)
That's the quality of reporting for you. Most original reports include confidence intervals. The Census, for example, provides access to economic indicator data with its confidence intervals.
Not newsworthy (Score:2, Informative)
Nothing new in this submission. It's well known that real-time economic data is noisy. This holds particularly true for real GDP as well some other statistics from the national income accounts (but less so for labor-market statistics). Revisions between the first and final data release of GDP average somewhere around 1 percentage point (that's in the US data, but it's probably relatively similar in the EU).
Re:Betteridge's law of headlines (Score:5, Informative)
No.
Actually, yes, in this case. People tend to think that "recession" has a fuzzy definition, and means bad economic times, or high numbers of jobless. It doesn't. Recession means two or more consecutive quarters of economic contraction. Period. A recession is not "over" when you get back to the previous levels of income and employment. It is over when you hit bottom and start to recover.
Re:Betteridge is actually wrong this time (Score:4, Informative)
Spain overall unemployment @ 28%
Spain also has a huge underground economy. Lots of people work "off the books" and are not counted in the official employment numbers.
Re:Betteridge's law of headlines (Score:5, Informative)
Being from Spain, this guy is right. The answer is a simple "no". I am giving zero craps about the wellbeing of the EU as a thing, but I can't take any more tax raises and salary cuts as we are. A new tax raise AND salary cut for all is coming soon. So yeah, the recession is here to stay.
Re:Betteridge is actually wrong this time (Score:2, Informative)
Really? I didn't know they were responsible for the implementation of Keynesian economic policy during the age of the great depression in the 1930's, and were fundamental in it's acceptance in the 1920's. Useful tip: Keynesian economics is what creates bubble economies.