Green Shoots

What does ‘green shoots’ mean?

Green shoot refers to signs of economic recovery found in indicators like retail sales, orders for manufactured goods, the unemployment rate, fluidity in credit markets and the rate of home sales and construction.

What’s the significance?

Last spring, Federal Reserve chairman Ben Bernanke told 60 Minutes that he detected “green shoots” of economic recovery, and since then, the phrase green shoots has taken root among those desperate for an end to the current crisis.  But is there reason to be optimistic?

Who’s talking about it?

Mark Thoma from Economist’s View cautions policymakers from pulling back stimulus programs before a recovery is certain… Tyler Cowen from George Mason University notes the inevitable contractionary monetary policy ensuing the Fed’s unprecedented expansion will reverse any uptick…Paul Krugman cites F.D.R.’s premature optimism and the lesson to be learned… James Hamilton from Econbrowser points to an interesting pattern in new claims for unemployment benefits peaking four weeks before recovery found by economist Robert Gordon.