While experts argue over what this recession will look like years from now, a University of Central Florida economist says it most resembles a gravy boat.
In his national quarterly forecast released on June 3, Sean Snaith says the pace of the economic downturn and anticipated recovery looks like the slanted handle, bowl bottom and prolonged spout of a traditional sauce serving dish.
“It has that shape,” says Snaith, director of UCF’s Institute for Economic Competitiveness, poking fun at the more typical descriptions of recession shapes and graphs.
“Forget the V-shape or other letters that economists talk about when they describe the economy,” he adds. “This will be a ‘gravy boat recession’ with a steady and gradual recovery. After touching bottom in the third quarter of 2009, we’ll see GDP slowly climb like a gravy boat’s spout.”
Although the country’s economic downturn will not be the deepest since the Great Depression, Snaith says it will be the longest recession and recovery period since then.
As such, he cautions against rose-colored predictions of a quick U.S. recovery amidst several encouraging signs this week of economic healing in stock markets, Americans’ income and construction spending.
“Consumers may soon be back from the dead,” Snaith explains. “But, as any aficionado of zombie movies knows, the living dead do not move very fast. Consumers may start spending again, but they will not be the driving force pulling us out of this recession.”
Snaith also weighs in on Federal Reserve Chairman Ben Bernanke, whose term is up in January. He urges President Obama to announce Bernanke’s reappointment immediately as a way to stabilize markets and provide a smooth transition from recession to recovery.
“It makes no sense to change the captain of the ship before the journey is over,” Snaith says. “We’ve still got quite a ways to go.”