Double dip recession: What are the odds?

Is a double dip recession on the horizon? No. But if the media continues to present such doom and gloom then maybe, just maybe, consumers might hold back their spending. This last quarter of better than expected earnings reports from retailers and food establishments proved that not only are we out of the recession but that Americans are spending money. Americans are spending cash as opposed to credit. This is a great sign. This is an interesting article.

By Annalyn Censky, staff reporter at CNN

NEW YORK ( — Europe’s debt crisis. Companies still not hiring. The Gulf oil spill. These are uncertain times to say the least. But while you might think economists would be running for the hills and looking ahead to a so-called “double dip recession,” that’s not necessarily the case.

In fact, some economists think a double dip is even less likely than it was earlier this year.

David Wyss, chief economist with Standard & Poor’s, said that even though he thinks slower U.S. growth is practically a sure thing, the odds of a double-dip actually have shrunk to 20%, from 25% earlier this year.

Same goes for Derek Hoffman, founder and editor of The Wall Street Cheat Sheet, who also puts the odds of a double dip at 20%, when just a few months earlier he saw them at 50-50.

The term “double dip” refers to a recession followed by a short-lived recovery that then slides back into a second recession. It can be measured by fluctuations in gross domestic product, or GDP — one of the broadest measures of economic activity.


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