Slowing growth does not signal a recessionary contraction

Although the year began with a fizzle, Beacon Economics is forecasting that the U.S. economy will not enter into a double dip recession in 2011

By ·

Although the year began with a fizzle, Beacon Economics is forecasting that the U.S. economy will not enter into a double dip recession in 2011.

Similar to the recent ISM findings, Beacon suggests that growth will pick up modestly in the last half of the year and into 2012.

While the nation’s economy slowed sharply during the first half of this year, slowing growth is not the same thing as a recessionary contraction. For the economy to actually shrink, there needs to be a significant and sustained negative shock to the system. Beacon Economics does not identify any such shock hitting in 2011. A number of good signs include stabilizing home prices and the fact that construction should pick up somewhat by the end of 2012. Population growth is sure to help chip away at excess housing supply nationwide.

And while Beacon share’s our reservations about President Obama’s recent proposal to help jumpstart the economy, if portions of the package are adopted, there may be some positive economic effect.

Beacon Economics is optimistic in the short term, but they note that the U.S. economy is still far behind where it should be in this stage of the business cycle, explaining much of the weakness in the labor markets.

There remain serious issues leftover from the massive imbalances that pushed the nation’s economy into recession in the first place.

Beacon believes that ultimately, there are some painful but necessary adjustments to be made and issues to address –including the Federal budget deficit and recent “loose money” policies by the Federal Reserve.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Economy · Global · Global Trade · All Topics
Latest Whitepaper
SaaS Supply Chain Management Systems
A guide to better understanding the market, the software and the benefits
Download Today!
From the November 2016 Issue
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL) provider that could successfully combine transportation services and technology capabilities under one roof.
Warehouse & DC Operations Survey: Ready to confront complexity
2016 Quest for Quality Awards Dinner
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Digital Evolution: Streamlining Logistics and Supply Chain Operations
In this FREE virtual conference we'll define the challenges facing operations and offer solutions designed to create dynamic, automated networks that offer seamless communication, improved collaborative third-party relationships, and the ability to respond to changes at a moment's notice.
Register Today!
EDITORS' PICKS
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...

Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...