The "R" word is back in vogue. Is a recession coming? It's a Grinch-like question for the holiday season, and it has a Grinch-like answer.

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The “R” word is back in vogue. Is a recession coming?

It’s a Grinch-like question for the holiday season, and it has a Grinch-like answer. Yes, a recession is coming — at some point.No one has yet repealed the economic cycle, though successive heads of the Federal Reserve Board have spared no effort trying.

So the real question is when a downturn will hit — in 2008 or, perhaps, a year or two later. There is no consensus on that, but the tone of the discussion has turned gloomier in the last few weeks. And there’s no denying that the economic issues piling up for the U.S. are significant:

— The so-called subprime mortgage mess, which may turn out to be the largest economic threat in the near term, also has led to a sharp decline in the availability of the “jumbo” mortgages that power expensive housing markets such as the one we have in the Seattle area. This situation has become acute enough that Treasury Secretary Henry Paulson on Monday suggested temporarily allowing government-backed mortgage giants Fannie Mae and Freddy Mac to purchase such loans to try to stimulate demand for higher-end housing.

— The plunging value of the U.S. dollar. The dollar has fallen so far that there is now a contrarian argument that it’s likely to rebound. But it’s condition is delicate and that could make it difficult for the Fed to cut interest rates much further.

— The failure of stocks to mount a sustained rally on interest rate cuts (so far, at least). In fact, stocks tanked the day after the last two rate cuts and the S&P 500 stands lower today than it did after the first cut in the federal funds rate on Sept. 18. This is unusual, and if it’s true, as some argue, that the stock market is a leading indicator of coming financial activity, then perhaps a glum outlook is appropriate.

Declining corporate profits, which also can indicate a softer economy down the road.

— Then, just last week speculation increased that we could be in for a bout of stagflation — that combination of low (or no) growth and high inflation that plagued the late 70s and early 80s — after the consumer price index for urban consumers bounced up at a 4.3 percent annual rate.

Even former Fed chief Alan Greenspan, who rarely misses an opportunity to extoll his economic legacy, says the U.S. is nearing “stall speed” and that the chances of a recession in the near term may now be 50 percent.

President Bush, speaking in Fredericksburg, Va., Monday acknowledged the economy is facing “challenges,” particularly in housing, according to a Reuters report. It’s going to “take a while” to work through the housing downturn, he said.

Not everyone is so gloomy, however. The Wall Street Journal reported Monday that a survey of economists showed that most doubted a recession was at hand.

According to the Journal:

“A lot of the underlying resilience of the U.S. economy seems a bit unappreciated,” says Citigroup economist Steven Wieting. “It’s not clear that this is so large a burden that we can’t muddle through this.”

In fact, muddling seemed to be a theme encountered by the paper, which said that,

… forecasters on average put the chance of a recession — often defined as two straight quarterly declines in gross domestic product — at 38%. That’s the highest in more than three years, but the forecasters’ best bet right now is that the U.S. will skirt a recession.

Though that may sound like a less than ringing endorsement of our economic health, it should be noted that the U.S. has not endured one, much less two quarters of negative GDP growth.

Further, The Christian Science Monitor says the drop in the dollar is making American goods attractive enough abroad that increased foreign trade may be enough to offset the effects of the housing slump.

But regardless of what the statistics and prognosticators say, many Americans apparently believe that our current economic state “feels” like a recession.

In an October CNN poll, nearly half of respondents thought the U.S. was in a recession already.

Similarly, a survey by Principal Financial Group found that,

The majority of American workers (71 percent) and retirees (72 percent) said they believe that the economy has fallen into a recession or fear that it is headed in that direction, according to the latest Principal Financial Well-Being IndexSM. More than one-third of workers (37 percent) expressed concern about their own job security, up significantly from second quarter this year, when only 22 percent of workers expressed concern.

Perhaps most telling, the economy has become the top issue on the presidential campaign trail.

If ordinary Americans are the canaries in our economic coal mine, they seem to be smelling something they don’t like.