The Great Recession – over and out?

With US GDP estimated to have risen 3.5% in the third quarter, both the federal government and the private sector have declared that the Great Recession is officially over. Making executives' smiles even wider is an increase in manufacturing output, marked by a 1% rise in factory orders in September and shrinking stock levels. Added to this is a third consecutive month of an increase in factory output while a recent national poll found much greater optimism among chief executives. But two of the biggest essentials for sustained economic recovery – trade and employment – continue to jangle nerves. Unemployment is over 9% while both exports and imports are down. All the big shipping lines continue to report losses and Maersk, the biggest, says its woes will continue to the end of the year. Another of the Big Five, NOL, expects to incur "significant losses" in the first half of next year. On the trade side, the earliest that there will be a rise in container imports is now expected to be February next year. For 2009, total container imports are expected to be as much as 16% lower than last year. Which is why there are almost as many pessimists as cheerleaders for economic prospects. Some economists have already questioned the third quarter GDP growth rate and others are saying that forecasts of a 4.5% increase in the fourth quarter are too optimistic. Warren Buffett obviously doesn't think so. His out-ofthe- blue $34 billion takeover of BNSF railway (the country's second biggest) is a sign that he reckons trade and the economy will roll along together. Just in which direction is the topic of debate among analysts.