Economy: Getting better or just less bad?

May 13, 2009

In much the same way that analysts have been debating whether equities are in a bear market rally or a new bull market, economists now have to deal with the question of whether the global economy is just bottoming out or is now actually recovering. The two things are obviously linked as BlackRock equities chief Bob Doll indicated when he said this week that equity markets will require the economic backdrop to actually improve rather than simply grow less bad if rises are to be sustained.

The less-dreadful-than-feared syndrome has been around for some time. U.S. markets, for example, found themselves cheering the loss of  539,000 jobs in April simply because its was the smallest since October and looked to be an improvement.

But talk of green shoots, a somewhat overused euphemism for the start of economic revival, has also been on the increase: European Central Bank President Jean-Claude Trichet spoke on Monday about the pick-up in GDP evident in certain areas; China said its efforts to boost growth were working; and a lot of institutional investors are acting as if the worst is over.

So, bottoming out or on the way up?  Comments below please.

(Reuters photo: Danish Ishmail)


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

I would say its getting less bad, decision makers like Trichet will always try to preach a positive message, they simply have to because they know that they can cause financial armageddon if they publicly lose faith.

Posted by Nikkei 225 | Report as abusive

Everything I look at indepth, job losses, falling home values, commercial real estate problems, credit markets still frozen, out of control gov’t deficits tell me we’re in for a slow road back to economic health.

Posted by whit | Report as abusive

We may have hit bottom but the recovery will be long and slow, gone are the V bounces, except bear rallies in the market, the economy recovery will be an L shape, a new beginning with a few years of slow and painful recovery.

Posted by wjp | Report as abusive

Ask all the people being laid off if the economy is getting better…..
I think the answer is ….no it’s not

And unfortunately we’re likely to see de-inflation or more likely hyper-inflation – where we need a wheelbarrow to buy a loaf of bread (better buy your wheelbarrow now)

The only people it seems to be getting better for or not affecting are the people in government. Maybe that’s why they don’t care?

Posted by SuzyQ | Report as abusive

A question like this is has such a complex background to it but everyone knows the answer. Funny how we can all know it but not express it in raw terms, in some way we are hesitant to see how far the ride will go. Let’s see if I can express it effectively for American’s, who are sadly the one’s that have borne the brunt of this thing. In Yosemite Nat.Park, for years Wolves were killed because they were considered a menace to the environment. Flora and Fauna were nothing like the descriptions given by your President Roosevelt we he first saw it. Upon recent reintroduction of wolves, within a few years things have started to take off like you wouldn’t believe.

Now some of you are wondering what’s this got to do with the economy. Well the economy is an environment that has lost it’s biggest predator, banks. You may hate them like wolves but the economies of the world grew as they were a part of it and just like nature when one species gets ahead of itself, it’s resources are then effected and they begin to die off. It takes time for things to naturally return to “normal” but knowledge and not greed; it’s efficient application, is what can help turn things faster, we have that capacity. I have been though my crisis that almost sent me bankrupt but through learning and action I have now exited the path I was on. My hopes are with everyone else that you too can correct your path. Each little effort will help everyone in our economic environment.

Posted by John | Report as abusive