Resolved: Economic Recovery is Imminent Pikes Peak Economics Club September 1, 2009 Fred Crowley for the Pro Argument

Isn’t a recession a period of diminished economic activity? It’s more accurate to say that a recession—the way we use the word—is a period of diminishing activity rather than diminished activity. We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when economic activity is contracting. The following period is an expansion. Source: NBER

El Paso County

Table 1: Business Conditions Index Components - All Values Indexed to Mar 2001 = 100 COS Enplane- ments El Paso County SF & TH Permits U Of Mich Con Sent Kansas City Fed Mfg Index El Paso Employ- ment Rate Colorado Springs 2% Sales & Use Tax El Paso County Car Sales El Paso County Fore- closures El Paso County Employed El Paso County Real Wages BCI Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun June 2009 Compared to: May %24.39%0.84%17.84%0.86%8.12%25.67%0.36%-2.23%-1.22%6.93% Mar %84.34%21.87%64.16%0.70%-3.73%3.57%0.25%-2.01%-3.50%12.35% Dec %91.25%14.81%37.86%-0.56%3.22%-10.72%-0.08%-3.34%-6.20%9.73% Jun %35.40%25.53%-28.10%-2.09%-14.38%-32.52%0.61%-4.73%-2.07%-4.86% Real wages in El Paso County are estimated by the Forum for the period Jan '09 through Jun '09

Source: UCCS Southern Colorado Economic Forum

NBER Key Indicators Non-Farm Employment – Coincident Economic Indicator (CEI) Aggregate domestic production (GDP) - Unreliable CEI Real Gross Domestic Income – Unreliable CEI Real Personal Income Less Transfer Payments– Lagging Indicator (CEI) Real Wholesale/Retail Trade Sales – CEI Industrial Production – CEI Source: NBER on 12/2007 start of recession

Conference Board Indicators Leading (LEI) Coincident (CEI) Lagging (LAG)

Conference Board Leading Economic Indicators (7 of 10 are up) 1.Average weekly hours, manufacturing 2.Average weekly initial claims for unemployment insurance 3.Manufacturers' new orders, consumer goods and materials 4.Index of supplier deliveries – vendor performance 5.Manufacturers' new orders, nondefense capital goods 6.Building permits, new private housing units 7.Stock prices, 500 common stocks 8.Money supply, M2 9.Interest rate spread, 10-year Treasury bonds less federal funds 10.Index of consumer expectations Source: Conference Board

Initial Claims for Unemployment Insurance, 4-Week Moving Average

Source: FRED ii

Conference Board Coincident Economic Indicators (3 of 4 are up) 1.Non Agriculture Employment 2.Personal Income Less Transfer Payments 3.Industrial Production 4.Manufacturing and Trade Sales

Source: FRED ii Industrial Production Index

Conference Board Lagging Economic Indicators (1 of 7 is up) 1.Average Duration of Unemployment 2.Inventory to Sales Ratio 3.Labor Cost per Unit of Output in Manufacturing 4.Average Prime Rate 5.Commercial and Industrial Loans 6.Consumer Installment Credit to Personal Income Ratio 7.Consumer Price Index for Services

Average Length of Unemployment Source: FRED ii

Percent Change in Total Loans and Leases Source: FRED ii

Conference Board Summary 1

Conference Board Summary 2 Change Over LastDiffusion Index for Indicator6 Months1 MonthMost Recent Month LEI3.0%0.6%70.0 CEI0.0% 75.0 LAG-3.2%-0.3%14.3 Source: Conference Board, August 20, 2009

Conference Board Summary 3 Indicator Group ImprovingNo ChangeWorsening LEI613 CEI301 LAG115 Total1029

Conference Board Conclusion “All in all, the behavior of the composite indexes suggests that the recession is bottoming out and that the economic activity will likely begin to recover soon.” Source: The Conference Board Leading Economic Index TM (LEI) for the United States, August 20, 2009

Emerging International Trends OECD (LEI) Trading Economics (GDP)

Source: Trading Economics

Summary Aggregate Evidence for Independently Verifiable, Objective Data Points and Trends All Support the Proposition that the Recession Is Over in Colorado Springs, The United States and the Major Trading Partners of the United States.