Those familiar with former U.S. Federal Reserve Chairman Alan Greenspan's observations about macroeconomics, in general, and the U.S. economy, in specific, will remember his comments regarding "irrational exuberance" -- imprudent buying of stocks; and "the conundrum" -- the tendency for long-term interest rates to remain low, despite Fed increases in short-term interest rates.

Enter a third: the "pale recession."

Greenspan Monday said the U.S. economy has slipped into an "awfully pale recession" and may continue to experience doldrums for the rest of 2008, Bloomberg News reported Monday.

Further, regarding the economy, Greenspan added that "we are clearly receding" and said it was too soon to declare an end to the credit crisis created by the collapse of the subprime mortgage market and housing sector correction, Bloomberg News reported. Greenspan declined to comment on monetary policy.
Economic Analysis: Greenspan articulated what many economists see in the current, sluggish U.S. economic data: a recession, but one that (so far) has been shallow, national median home prices and foreclosure rates excluded. U.S. Commerce Department data released earlier indicated that the U.S. economy barely grew in Q1 2008, registering 0.6% GDP growth, with Greenspan noting a growth rate at about zero. Still, despite the housing slump and credit crunch, job losses have been relatively low, or 'pale' (again, so far) -- amounting to only about 260,000 jobs lost since the employment peak in December 2007, according to the Economic Policy Institute. Further, a pale recession, from a job loss standpoint, would be consistent with the paleness of the recent U.S. economic expansion 2001-2007, which had the lowest GDP, investment, employment growth, and employee compensation of the 10 expansions since 1949.