So far, the economic activity data we have received this year is consistent with this outlook. For example, GDP rose by an impressive 6.4 percent in the first quarter, with real final sales to private domestic purchasers up an eye-popping 10.6 percent.
But last year, despite a sharp drop in consumer confidence and a decline in wealth from lower equity values, households kept buying. At this point, it is still too early to classify this recession as mild or severe. In general, economic fluctuations in the past fifteen to twenty years have been tamer than their counterparts in earlier eras.