"It May Not Even be a Recession"

John Berry continues to argue that things aren't so bad:

Recession Is Still a Possibility, Not a Reality, by John M. Berry, Bloomberg: The resilience of the U.S. economy in the face of a devastated housing sector and a financial crisis is amazing. The severe recession some have predicted is still nowhere in sight.

The odds are at least 50-50 that the current period of economic weakness won't be labeled as even a mild recession. Federal Reserve Chairman said as much yesterday in testimony before Congress's Joint Economic Committee. ... That forecast is in line with those of a number of private economists. ...

There are indications that some of the financial market distress may be easing. ...

In many ways it doesn't matter a great deal on which side of zero the GDP growth rates fall for the first two quarters of this year. Most U.S. recession periods have included two quarters of falling GDP.

What's important is that a cumulative down spiral in jobs, consumer spending and business investment not materialize, and few economists believe one will develop this year.

For one thing, even with the financial crisis U.S. households and businesses haven't been starved for credit, except for residential real estate and high-yield type credits, according to the Deutsche Bank economists. ...

None of the better news means the economy is out of the woods yet. As Bernanke said, ''the risks remain to the downside.''

Payroll employment may fall more, the unemployment rate probably will rise and consumer spending isn't going to be strong. Nevertheless, this isn't a replay of 1929 or Japan's lost decade of the 1990s. It may not even be a recession.