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U.S. recession declared over
The U.S. recession ended in June of 2009, according to the group that determines such things. But that begs the question: With millions unemployment and millions who have lost their homes, do American's know it? The National Bureau of Economic Research said today that its Business Cycle Dating Commitee met yesterday via conference call and determined that the economy bottomed more than a year ago. "The trough marks the end of the recession that began in December 2007 and the beginning of an expansion," the group said. "The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months."
The NBER, though, gave a nod to the sputtering recovery and the extreme troubles left by the recession and the financial crisis: "In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favourable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales ... The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date."
The NBER announcement came just hours after the Organization for Economic Co-operation and Development downgraded its outlook for the U.S. economy, forecasting that it will expand just 2.6 per cent this year.
The recession killed the jobs of millions of Americans. Here's where things stand:
- The U.S. jobless rate is at 9.6 per cent. The so-called underemployment rate, which includes those who have given up searching and part-time workers who'd prefer full-time work, is at 16.7 per cent. More than 8 million jobs were lost in 2008 and 2009.
- The U.S. poverty rate is up for the third year in a row, to 14.3 per cent. More than 43 million people live in poverty and almost 51 million have no health insurance coverage.
- The number of home foreclosures in the United States in August hit the highest monthly level since the beginning of the crisis.
The main event
Markets are increasingly focused on tomorrow’s meeting of the Federal Reserve, and whether the U.S. central bank will unveil any new measures to spur on the faltering recovery. The focus is on whether the Fed could resume large purchases of U.S. Treasuries in a move to drive down interest rates even further. But, The New York Times notes today, the meeting is the last for chairman Ben Bernanke before midterm elections in the U.S., and it’s likely the Fed will hold off doing anything at such a “politically delicate moment.” Coupled with that is the fact that economic indicators of late have been mixed.
