As the FT notes this morning, Amazon's sales growth has disappeared:
As Danny Blanchflower and I keep saying, this is because we are already heading for, and may actually already be in, recession.
It's not rocket science to note that if spending is slowing, or falling, as just about every indicator suggests to be the case now, this must be true.
There is, however, still denial from the government and few economists are acknowledging this obvious truth. That will just make dealing with the issue more painful by the time they get around to doing so.
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My view is that because many in this Tory Government thrive on chaos, they want things to get worse as an excuse to sell off state assets that they will be saying we can’t afford, just like the vulture funds wait to pick off failing companies at knock down prices in the City.
We’ve got to remember that this lot – since 2010 – have come back to finish the job that Thatcher started – they see it as their destiny to do this.
Hopefully – not off-topic – Inflation will not help – there was an interesting stat in this article:
https://www.euractiv.com/section/economy-jobs/news/uk-confirms-plan-not-to-introduce-checks-on-eu-goods-until-2024/#comment-360428
extract: ” the UK in a Changing Europe academic thinktank revealed on Thursday that trade barriers created by Britain’s exit from the EU and the new Trade and Cooperation Agreement with Brussels have added 6% to the cost of food in the UK” – throw in price rises in energy & it all points to a very very bad situation indeed. Odd that unrest is so muted.
Yep. Between this and the rise in the number of companies in financial distress… It looks like a no-brainer dunnit?!
One possible explanation for the Conservative and Unionist government’s inaction is that recession is exactly what they want.
Friedman would be delighted.
This article is worth a read – is Kenneth a signed up member of the ‘Mile End Economists Club’ ?
Risk of recession in Europe, US and China is rising by the day – Kenneth Rogoff
https://www.theguardian.com/business/2022/apr/28/risk-of-recession-in-europe-us-and-china-is-rising-by-the-day
‘Is the global economy flying into a perfect storm, with Europe, China, and the US all entering downturns at the same time later this year? The risks of a global recession trifecta are rising by the day’.
‘A recession in Europe is almost inevitable’
‘In fact, the Chinese economy may already be in recession’.
‘And with US consumer prices currently increasing at their fastest rate in 40 years’
‘The risk of a US recession has surely soared, with the main uncertainties now being its timing and severity’
He agrees
But I think he’s way behind the curve and has the causation wrong
The data, evidence, proof of a recession just keeps on coming……………ignorance and denial is bliss.
Number of firms in critical financial distress rises sharply
‘It’s just a case of when the dam holding it back finally bursts’
https://www.bbc.co.uk/news/business-61258362
Kenneth Rogoff? See Reinhart-Rogoff controversy on GDP stats, around 2013. That Rogoff? Well, well; if it is so, while it must be acknowledged and allowed that mistakes do happen to anyone – nevertheless, the issue of this controversy was important; thus, it may also be surmised, the persistence of archaic economics and its controversial research methods in the public sphere, while at the same time new thinking struggles for attention and is too often dismissed on noticeably weak anlaytical or research grounds, remains remarkable. In what other discipline does this happen, to this extent……?
Possibly none
Except real world politics
“Amazon sales growth has disappeared”…
Well figures in lockdown are high for obviously reasons.. customers then spend relatively more on shops upon the economy reopening don’t they? I wouldn’t expect “sales growth” from a lock down figure would you??
They did
Richard,
How is a recession actually defined?
Technically it is two quarters in a row with falling GDP
But remember, GDP is frequently restated. So we could be there already I.e. we could well be in the second quarter already
How can we be in the second quarter of a recession already, if Q1 was positive? Or are you seriously suggesting that March 2022 will show a GDP decline of more than 1%?
Is that your prediction ‘on the record’? I don’t think there are many (any?) economists predicting such a fall?
The ONS has already admitted major revision is possible.
And we can be in recession now I.e. from the start of this quarter. Of course it is confirmed in retrospect, but the planning can only be forward
GDP was positive in Q4 2021, therefore, the soonest that we can be in recession is 1st July 2022 – immediately after 2 successive quarters of negative growth.
Politely, please do not be stupid
That means we were in recession on 1 January, so it can be closed now
What on earth are you talking about?
By what possible definition were we in recession on 1st January?
Wait until q1 is revised downward
In 2008 recession began in April
Just look at history
Richard,
How big have revisions been previously?
How can we possibly have been in recession on 1st January?
We may or may not have been. Time will tell. I am certain we are now.
Just as I am certain you are wasting my time
It seems what some don’t understand is that although a recession cannot be declared until there have been two quarters of decline in GDP, so after the end of the second such quarter, the start date for the recession is not the date of its declaration or the end of that two quarter period, but is the START of that two quarter period. So we can find out at the end of June that a recession started at the beginning of January. And if the preceding quarter (Q4 2022) gets revised to be negative then the recession might have started Oct 2021. So by definition we are always 6 months into a recession before it is declared, unless GDP change gets revised from negative to positive.
Precisely
Does it really matter what the official definition of a recession is?
Does it really matter if we are officially in a recession?
We are, currently. fucked. By we, I mean the people living normal lives in the UK
You get my concern
Having ‘concern’ is one thing. Mis-using universally-understood economic definitions and making hyperbolic claims is not.
Are you denying that the ONS restates GDP?
Are you denying that the UK was in recession six months before it was declared to be so in 2008 when almost everyone but what you would seemingly call hyperbolic ecponomosts denied it?
Are you saying then that no one should make such claim until the ONS gives consent for it to be so?
When the ONS cannot get the national debt right, why should we listen to it on this anyway?
Pkease explain why your qualification lets you make such ridiculous claims?
Please post your full CV to support your claim whilst you are it.
Please also explain why I am not qualified, come to that.
If you will not, I suggest the problems are all yours.
Forgive me, but could you explain why someone commenting under an anonymous title, presumably calculated to lend authority “a qualified economist”, carries any authority or credibility at alll? Nobody reading your comment could possibly know whether you have any credibility at all, nor do you present more than a bald claim, with no evidence. The fact that you are prepared to comment in this way, itself drains all authority from your gratuitous assertion. If you have either a name or argument, present them, by all means.
I am really tired of this social media trolling guff.
The person commented again. Oddly a very different email address. This person is a spammer. I treated then as such second time round.
As an extension to the question of whether or not we’re in recession (or heading for one) the Graun has an article (linked in the header) which mentions that Adam Posen, once of the MPC, thinks that the BoE is duty-bound to put us into recession with interest rate hikes! The floggings will continue until morale improves, I suppose.
I have never agreed with much that Posen has said
There may be a blog in the morning
It depends on whether I have recovered enough from the bug I have had all weekend…..