It's Not a Recession

The U.S. economy expanded by 0.6% in the first quarter of the year. The pace is critically low, but faster than anticipated and is, after all, an expansion. Hence, we have not entered a recession.

Economists, naturally, note reasons for the weakened economy as including the deteriorating housing market and home foreclosures, an uptick in unemployment, lax consumer purchases, soaring energy and food prices and a growing credit crunch. Of course, analysts are hesitant to answer the "chicken-or-the-egg" conundrum, and do not clearly distinguish between causes and effects.

The Bush administration is hopeful that the $168 billion stimulus package will reinvigorate the economy. Congressional Democrats, as always, are calling for increased spending on social programs (such as unemployment benefits). As the Democrats will not likely find any traction, the next quarter will determine if the president's gamble is successful - the first rebate checks will reach mailboxes on Monday.