A Second Dip Still Unlikely

Despite some negatives, there's no lack of data pointing toward a recovery.

DOUBLE-DIPPERS WERE BRIEFLY FORCED to revise their dopesheet in response to key economic data released last week on manufacturing and on jobs. Not only do the data negate the likelihood of an imminent relapse into recession. The monthly figures even suggest that growth in real gross domestic product for the April-June quarter ran a bit faster than its annual rate of 2.7% in the January-March quarter.

Friday's eagerly awaited jobs report for June revealed an increase of 83,000 in private-sector employment. But since any single month's number is highly volatile and subject to revision, the three-month tend helps clarify the picture. For the April-June quarter, monthly gains in private employment averaged 119,000, up from an average of 79,000 in the first quarter.

These figures, taken from the establishment-survey part of the monthly jobs report, often provoke skepticism on the grounds that too much guesswork goes into adjusting the numbers for business births and deaths. The skeptics' doubts should be allayed by parallel data tracked in the household-survey part of the report, from which the unemployment rate is taken.

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Finally, double-dip dopesters take note: The Credit Suisse probability model of recession, discussed here last week, put the six-month probability of recession at zero—and still does.

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