Magazine article Marketing

Does Anyone Really Know What Is Going on with the Economy?

Magazine article Marketing

Does Anyone Really Know What Is Going on with the Economy?

Article excerpt

All the signs are that the rot has already set in and confusion is nearly total

As forecasting goes, it ought to be a pretty simple task. Is there going to be a recession? How soft will the soft landing be? And is adspend going to show strong growth this year?

Yet in the past few days it has proved impossible to get a straight answer out of economists and financial specialists paid a great deal to come up with an unambiguous answer to whether the economy is going to go up or down.

As with many social phenomena, the problem starts in the US. There is the mighty Morgan Stanley declaring a recession, with the equally respectable Lehman Brothers saying it ain't so. Then there are the sophisticates that try to have it both ways by conceding that a recession is likely, but that Federal Reserve chairman Alan Greenspan will stop it happening. To this hodge-podge, spurious levels of mathematical precision are then added by probability percentages. Little better should be expected from a bunch of guys who can scarcely be relied on to elect a president.

The confusion is only important because of the impact US forecasters have on our forecasters. All the signs are, as a careful forecaster would say, that the rot has already set in and confusion is nearly total.

For those who don't make it up entirely, one of the tricks of the trade is extrapolating from where we are now.

So it was that we found out last week the disastrous news that advertising spending in traditional media had fallen in real terms for the first time since the recession of the early-90s. …

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