The Power of Zero

Laura Conway writes that the recession is over in France and Germany:

Call it a mighty .3 percent. France and Germany report their economies were each growing by that much between April and June. Feast on the headline: “France and Germany Exit Recession.” The overall eurozone economy was still contracting, a .1 percent. Last quarter, the U.S. economy was shrinking at a pace of 1 percent.

One interesting thing here is the sort of mysterious psychological power of zero. In a non-recessionary situation, nobody would think that 2.9 percent growth was very different from 3.3 percent growth. But when you take the numbers and make them -.1 and .3 then suddenly the 0.4 percentage point difference looms very large—it’s the difference between recession and non-recession!

At any rate, I think it’s looking pretty clear that the developed world either has already or else will soon pull out of technical recession territory. But will growth be robust enough to put people back to work, or will job growth continue to lag behind labor force growth? The latter is a very plausible scenario, and would pretty much amount to a recession for the vast majority of people.