Quantifying the Recent Summer Swoons

It’ll be kind of funny if the developing 2012 summer swoon ends up like the last two (i.e., fleeting) as seen in the graphic below from this story at the Economist’s Free Exchange blog. If so, many doomsayers will have egg on their faces, not the least of which will be the ECRI’s Lakshman Achuthan who, basically, has staked the company’s future on their 2012 recession call as detailed here earlier. Importantly, Achuthan warned last year that we weren’t headed for a recession, which makes his 2012 recession call all the more compelling.

In looking at the last two summer slowdowns, I was taken aback by the dismal state of the jobs market in 2010 and, as might be expected, that recession scare was worse than that seen last year as shown above. Going into the summer of that year, nonfarm payrolls had risen by nearly a million in just a few months following more than two years of job losses during the recession. Then, from June through September of 2010, payrolls declined by 303,000 before the announcement of the Fed’s QE2 helped pull the U.S. economy out of its nosedive. It’ll be interesting to see what happens this time around…