The Recession Ended Last Year?

Well, the recession that began in December 2007 was technically over in June 2009, officials at the National Bureau of Economic Research (NBER) said this past week. The experts use all kinds of macroeconomic data to determine that a “trough” occurred in business activity in the summer of 2009, such as real GDP, real income, employment, industrial production, and wholesale-retail sales.

But the Great Recession that ended over a year ago has smacked us so hard that the bruise is still there. For many Americans, things are no better or even worse than they were before the recovery supposedly started. The Census Bureau just reported that the poverty rate of 14.3% in 2009 was at the highest rate in fifteen years.

For single mothers, nearly one in three lives in poverty. And one in four among blacks and Hispanics survive on less than the federal poverty threshold of about $22,000 for a family of four.

And while the insured unemployment rate is currently 3.5%, the Labor Department reports that the nation’s actual unemployment rate has been around 9.5% for the past sixteen months or so (with three months at the end of 2009 that tipped right around 10% - meaning that the unemployment rate actually increased after the recession "ended." Huh?).

So one in ten is unemployed, but that only counts the officially unemployed - the ones who meet the Labor Department’s definition of being unemployed by looking for work sometime in the preceding four weeks before the survey.

If you haven’t looked for work recently, you don’t count as being unemployed in the government’s numbers. Or if you took a part-time job because it was all that was available and you took what you could get to feed your family, you don’t count as being unemployed.

And all those people who fly under the radar and prefer to get paid in cash for odd jobs, they aren’t being counted in the numbers either - even though they are having just as hard of a time finding work as the rest of the nation.

Some experts say the true unemployment rate is closer to 22%; some say it’s even higher.

NBER stated in the report, “In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable 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.”

NBER also said that economic activity typically remains below normal during the early stages of a recovery, and sometimes even for a sustained period of time, and that if we do have another downturn in the near future it would be considered a separate, new recession.

According to a separate Census Bureau report, it seems like many Americans have braced themsleves for a slow turnaround in the economic situation - there was a 13% increase in the number of unmarried cohabiting couples this year. Is Cupid really working overtime? Or are these couples just trying to save on costs where they can?

And what about those who lost a good portion of their life savings when their investments were no longer worth what they used to be? Many will have to put off retirement and stay in the workforce much longer than they hoped. That won’t help the nation’s employment situation.

Well, I’m not an economist; I’m just a consumer, a worker, and a taxpayer. They say that we are on our way to recovery, but it doesn’t look very promising yet.

The eighteen month recession of 2007-08 was the longest of any recession since World War II. Before this last one, the longest postwar recessions were from 1973-75 and 1981-82, both lasting sixteen months.


Sources:
National Bureau of Economic Research
U.S. Census Bureau
U.S. Department of Labor