Conflicting data leaves investors unsure about the whether or not the economy is headed toward a double-dip recession.
Is there going to be a double-dip recession? Is it already here?
A survey of investor attitudes conducted by Millionaire Corner in September found no clear answer. Just over 38 percent say they agree or strongly agree that a double-dip recession is imminent, while just over 39 percent are ambivalent. Fewer than 23 percent do not believe America is headed toward another recession.
A 2010 wealth level study of Millionaire households provides discomforting news. When asked what they believe is the primary indicator that a recession is over, more than 81 percent said a drop in the unemployment rate. Sixty-one percent said they would consider a recession over when the unemployment level dropped to less than 6 percent.
Some key economic indicators are not promising. Unemployment remains above 9 percent, the U.S. economy is not growing, and there is a global debt crisis. Speaking on CNN this morning, Economic Cycle Research Institute's Lakshman Achuthan said that “This recession will not be denied.”
Of those we surveyed, investors ages 41-50 were the most pessimistic about the direction of the economy. Just over 46 percent said they believed there will be a double dip recession. They were also the least likely to disagree with that statement.
But there are some positive signs as well. As Financial Times noted, the Institute for Supply Management’s gauge of U.S. manufacturing activity ticked upward for September to 51.6 from 50.6 in August. This is not a stellar number, FT reported, but it confirms “that the American economy was still afloat and defying fears of a double-dip recession.”
Investopedia defines a double-dip recession as “when gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth.”