So now it’s certain we’re headed for the dreaded double-dip recession, right?
Not so, Coins2Day’s Nin-Hai Tseng contends. She points out that the first recession still hasn’t ended, according to the propeller heads who decide these things at the National Bureau of Economic Research. The NBER is notoriously slow on the uptake on these sorts of things — but this time they may have legitimate reasons, she suggests.
That’s not exactly reassuring, but then neither are the data. Friday’s weak jobs report is only adding to the sentiment that the green shoots seen briefly last year have long since turned brown.
That view is very much in line with one market measure that has been flashing red throughout 2010: the spread between nominal and inflation-protected five-year Treasury notes.
Inflation expectations by this measure have been tumbling throughout 2010, notes economist David Beckworth. The spread between the two yields has dropped to a recent 1.5 percentage points from 2.1 percentage points at the start of the year — not typically a sign of a recovering economy.
But the sweetest line comes from Gluskin Sheff economist David Rosenberg, who has been questioning the strength of the economic bounceback practically since day one. He notes that the dour headline jobs numbers may even understate the size of Friday’s jobs-creation shortfall.
By now you are surely hungry for a scorching summer punchline, so here it is.
“If it’s not a double-dip,” Rosenberg writes in a note to clients, “then it’s Mr. Softee.”