The latest reason to ignore anything Warren Buffett says about the economy
More importantly, while 1Q 2008 GDP was low by our standards (although "normal" by French standards), it was still positive. So have all other quarters of GDP since...2001. "Recession" means two consecutive quarters of economic growth, so how can we be in a recession when we haven't had a single negative quarter yet?
Could Buffett justify claims of a "recession" based on other economic indicators? Hardly. I debunked the latest job numbers a few weeks ago, which were because of 200,000 new entrants to the workforce. Hourly earnings and productivity are still up. Do people care about weakening industries and credit markets? No, they care more about what they bring home, and their employers care about how efficiently they produce. That's the remarkable resilience of the American economy: it still grows despite all the supposed weaknesses in construction growth and consumer spending. In the end, their changes are merely shifts in economic activity, because a decline in one can mean an increase elsewhere in the economy -- other growing industries the mainstream media doesn't like to admit are growing, and/or personal saving that fuels business investment. Obviously if construction spending and consumer spending fall, but economic growth is still positive, there are more-than-offsetting gains elsewhere in the economy.
Where's the recession, Buffett?