Recession Over as of June 2009
The recession ended in June of 2009. I feel better already. How do I know? The NBER told me so.
The way this works is that an organization called the NBER (National Bureau of Economic Research) decides when recessions start and when they end. You can read their announcement here.
So why did it take so long for them to announce? After, we're not talking June 2010; we're talking June 2009. That's 15 months ago.
What they do is they measure a recession from "peak to trough." And the peak month before June 2009 was December 2007 - the month what the recession began.
If you do decide to read the NBER announcement you'll see their reasons for taking so long to announce either the beginning or the end of a recession. It all kind of makes sense. The statistics they use only come out quarterly - plus they're subject to subsequent revision. So they want to be sure before they say anything.
You'll also see that they hedge their announcement by saying that the announcement isn't saying things are going all that well now. All they're saying is the declining economic activity that started in December 2007 turned around in June 2009. Economic activity started turning up in June 2009.
So, according to all these definitions, an economic expansion started right after June 2009.
Now, economic activity doesn't have to be all that great to signal the beginning of an expansion. It just has to not be going down.
But they hedge their bets even more.
First, they explain that economic activity can stay pretty weak for a long time (they don't say how long: months? years?) when a recession ends and an expansion begins. Second, they point out that just because they're saying that the recession ended, they're not ruling out another recession taking place - even in the short-term.
So now you know, and I hope you feel better too.
As for me, maybe I should call all those folks I know who lost their jobs, are struggling to make ends meet, have homes worth less than their mortgages, have debts that continue to grow, since they're income has either stopped or shrunk, or who are simply in big-time financial trouble due to the recession that just ended. I'm sure they'll be happy to know the economy's expanding.
Of course, many of those unemployed folks, depending on exactly what they did for a living, aren't getting their jobs back anytime soon - if ever. See, the U.S. has either exported their jobs overseas or eliminated their jobs with technology (what's known as "productivity gains").
So now it's time for all those folks who talked about the "free market" being the solution to our economic troubles - including unemployment - to start explaining how and when should be seeing good times again. I'm all ears.
Here's the thing. Since this was the longest recession in the U.S. since World War II, then, if things really are getting better, we should be seeing significant - even dramatic - improvement soon, right?
That is, unless we slip back into recession.
Or there's that other possibility - that the economy just kind of weakly stumbles along for months, or, as some are saying, for years.
In which case, we may not be in recession, but we will be in a kind of "limbo" where the "haves" keep having and the "have-nots" keep not having.
For now, I'll keep my eyes and ears open. I sure hope things are getting better. It's just that I'm not seeing it yet. Are you?
The way this works is that an organization called the NBER (National Bureau of Economic Research) decides when recessions start and when they end. You can read their announcement here.
So why did it take so long for them to announce? After, we're not talking June 2010; we're talking June 2009. That's 15 months ago.
What they do is they measure a recession from "peak to trough." And the peak month before June 2009 was December 2007 - the month what the recession began.
If you do decide to read the NBER announcement you'll see their reasons for taking so long to announce either the beginning or the end of a recession. It all kind of makes sense. The statistics they use only come out quarterly - plus they're subject to subsequent revision. So they want to be sure before they say anything.
You'll also see that they hedge their announcement by saying that the announcement isn't saying things are going all that well now. All they're saying is the declining economic activity that started in December 2007 turned around in June 2009. Economic activity started turning up in June 2009.
So, according to all these definitions, an economic expansion started right after June 2009.
Now, economic activity doesn't have to be all that great to signal the beginning of an expansion. It just has to not be going down.
But they hedge their bets even more.
First, they explain that economic activity can stay pretty weak for a long time (they don't say how long: months? years?) when a recession ends and an expansion begins. Second, they point out that just because they're saying that the recession ended, they're not ruling out another recession taking place - even in the short-term.
So now you know, and I hope you feel better too.
As for me, maybe I should call all those folks I know who lost their jobs, are struggling to make ends meet, have homes worth less than their mortgages, have debts that continue to grow, since they're income has either stopped or shrunk, or who are simply in big-time financial trouble due to the recession that just ended. I'm sure they'll be happy to know the economy's expanding.
Of course, many of those unemployed folks, depending on exactly what they did for a living, aren't getting their jobs back anytime soon - if ever. See, the U.S. has either exported their jobs overseas or eliminated their jobs with technology (what's known as "productivity gains").
So now it's time for all those folks who talked about the "free market" being the solution to our economic troubles - including unemployment - to start explaining how and when should be seeing good times again. I'm all ears.
Here's the thing. Since this was the longest recession in the U.S. since World War II, then, if things really are getting better, we should be seeing significant - even dramatic - improvement soon, right?
That is, unless we slip back into recession.
Or there's that other possibility - that the economy just kind of weakly stumbles along for months, or, as some are saying, for years.
In which case, we may not be in recession, but we will be in a kind of "limbo" where the "haves" keep having and the "have-nots" keep not having.
For now, I'll keep my eyes and ears open. I sure hope things are getting better. It's just that I'm not seeing it yet. Are you?
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