Tuesday, July 27, 2010
San Antonio & Nation NOT Headed for Double Dip Recession
SAN ANTONIO – In a mid-year economic update given this morning at a SABÉRResearch Institute event, two local economists presented data that shows that neither San Antonio nor the nation is going into a double dip recession as indicated by someeconomists.The findings were presented by Steve Nivin, Ph.D., SABÉR chief economist anddirector, and Keith Phillips, Ph.D., senior economist and policy advisor for the FederalReserve Bank of Dallas-San Antonio Branch. Nivin and Phillips updated their economicprojections and findings first presented back in January.Today Phillips re-emphasized that the national recession is likely over, althoughgovernment debt problems in Europe highlight that markets are still fragile.“A negative yield curve has preceded every recession since the mid-1950s and it iscurrently quite positive, indicating a very low chance of recession over the next four quarters,” said Phillips. “We may see some slower growth throughout the rest of the year and into 2011, with the average forecast in the Blue Chip Survey predicting between 3and 3.5 percent growth for the nation.”Phillips calculated the probability of recession, based on his analysis of the yield spread(the difference between the 10 year and one year interest rates on governmentsecurities). In his presentation, he showed that they indicate a very low probability of adouble-dip recession over the next fours quarters.