Double Dip Recession Tweets of the Day

Mish

The Covid recession isn't even over yet, but there is already talk of a double dip coming.

Double-Dip Ahead?

Sharp Contraction in France

Eastern Europe Covid Deaths

Furloughed Job Disguise

No Trade Deal

Yes, Deaths are a Problem

Due to another Covid surge in Europe and the US, the odds of a double-dip recession (or a delay in the current one ending) have increased.

Europe is also at risk from a collapse in a trade deal between the UK and EU following Brexit.

First Things First

Before you can have a double-dip recession, the current one has to end first.

And that largely depends on how one measures it.

Europe vs the US

European countries typically use a simple rule. Two consecutive quarters of contraction marks a recession.

In the US, the NBER can declare a recession even before there is one quarter of contraction. It did so in February of this year.

I have seen claims the US recession is over already. But the recovery is so uneven I doubt the NBER (the official arbiter of recessions in the US), would see it that way. But perhaps they do.

In Europe, countries  may very well declare a recession is over as soon as there is a single quarter of growth.

Whether or not there is a double-dip may be in the eyes of the beholder. 

Flash PMI Signals Renewed Economic Downturn

In Europe, Flash PMI signals renewed economic downturn at start of fourth quarter. 

Business activity fell back into decline across the eurozone in October as accelerating growth of manufacturing output was overwhelmed by a steepening deterioration in the service sector amid rising COVID-19 worries.

Germany was the only bright spot, as France and the rest of the region as a whole fell deeper into decline. The rate of job losses eased, but forward -looking indicators deteriorated: inflows of new business showed a renewed decline and business optimism for the year ahead slipped to the lowest since May.

Deflationary pressures meanwhile eased as business costs rose at a faster rate. The flash IHS Markit Eurozone Composite PMI fell for a third consecutive month in October, dropping from to 50.4 in September to 49.4 to register the first contraction of business activity since June

US Recession Over?

Some claim the US recession is already over. If so, it was the most uneven recovery in history.

An L-, K-, or W-shaped recovery isn't much of a recovery whether or not there is a double dip.

For further discussion, please see It's Professionals vs Everyone Else in the K-Shaped Recovery 

Mish

Comments (61)
No. 1-11
PecuniaNonOlet
PecuniaNonOlet

10 days till election and I just canceled my December vacation to Hawaii. That may serve as anecdotal evidence of a double dip recession but with covid spiking back up, I did not want to risk having more money spent on airlines that I wont get back. Nor do I want to risk getting covid especially with no mask idiots on planes.

njbr
njbr

Have you ever been to dinner at the house of a pretty poor cook, and you finish up, saying, that wasn't too bad....

But then they bring out dessert, tofu grasshopper pie...

Have you ever gagged when you took the first small bite?

Lance Manly
Lance Manly

The US flash PMI came in strong 55.5

Doug78
Doug78

It's definitely not your typical recession since the cause is medical rather than economic imbalances and that makes comparisons with earlier ones much harder to make. It seems that it has taken six years of economic trends and collapsed them down into one. On top of it it has destroyed the idea of Austerity as a policy and there is no going back at least in this cycle.

njbr
njbr

Northern hemisphere upswing in cases, hospitalizations, and inevitably deaths as life moves indoor.

Don't look too closely, it might burst your bubble, but cases in Sweden are now higher than their previous peak.

Sechel
Sechel

The economy can't be solve until Covid is dealt with . You're simply not going to have people confiently going to the movie theater, bars & restaurants etc while this hting is out there. Europeans are losing resolve and getting burned out from wearing masks and social distancing so the infections are rising again.

KidHorn
KidHorn

In my neck of the woods, homebuilders are revving up. I just read announcements for 2 new townhouse developments within a couple miles from me. Maybe due to people moving to suburbs. Not sure.

I was planning on building a shed. No hurry. Took one look at lumber prices. I'll wait.

EGW
EGW

Is just 2.4 US deaths per million per day really a pandemic? Twice as many people die from cancer every day, and even more people die from heart disease each day.

Eddie_T
Eddie_T

Even the Fed has been calling for more bailouts for what, two months?

Mish's reports have made it clear for a while....we have another dip coming. Unless massive bailouts are rolled out soon... it is likely to be worse than the first one.

I do not favor additional lockdowns....but a coherent national push for simple public health measures (which we will probably come closer to in a Biden administration) would go a long way toward easing the coming pain. Just sayin'

RonJ
RonJ

"If so, it was the most uneven recovery in history."

Disney World: open for months
Disneyland: still closed.

Realist
Realist

The US economy is going to keep struggling until it gets a leader who will bring in a plan, and then execute that plan to fight the pandemic.

For now, just watch the pandemic numbers keep going up each week:

Worldometer numbers for USA

New cases: deaths

Oct 20 62,478:952

Oct 21 64,067:1224

Oct 22 74,446:973

Oct 23 81,210:903


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