Edward Hadas & Constantine Courcoulas / Sep 02, 2009, 00:46 IST
Breakingviews Economic Spot-check: The V-crowd should hold off on victory cries. While many economists would like the sharp economic decline to be followed by an equally sharp recovery – forming a V – there is little evidence of a take-off. The Breakingviews Economic Spot-check – the new name for the Green Shoots Spotter – came in at 2.5 last week (including the data from the August 31 UK Bank Holiday Monday). That’s the midpoint between Slow Decline and Stability. It’s well above Recession Blues (1 on the BES scale), but far from Off to the Races (a 5).
Unemployment is still rising, for example in Japan. Credit is not flowing freely and many producers are still adjusting to the decline – not gearing up for recovery. The good news is still either predominantly financial – rising house prices in the US and UK – or recoveries in particularly depressed parts of the global economy, for example international trade. As the G20 leaders prepare to meet, they can banish fears of an economic free-fall, but they have no cause for exuberance.
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