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Your Take: Is Your Recession Over?

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The National Bureau of Economic Research issued a report earlier this week in which they said the economic recession, that started in December 2007, ended in June 2009, 18 months later. It was the longest recession since World War 2 (1973-1975 and 1981-1982, both 16 months) and that any new economic downturn would be a new recession. The report is a little dry, heck the summary is like a walk in the Sahara, and makes for good headlines, but ultimately a recession is defined by people, not numbers (numbers lie!).

With so many houses underwater, nearly 10% unemployment, and all the other “signs” of a recession, I want to know what you think. Do you think we’re out of the recession?

We may be out of the technical definition of a recession but it’ll be quite some time before we return to the happy days of three or four years ago. With it being football season and all, I think a most appropriate analogy is when a kicker outkicks his coverage. Our economy, fueled by banking and financial chicanery (which we were all complicit in, you can’t blame the drug dealer for getting addicted), grew far too fast to be healthy, our home prices grew far too fast for our incomes, and now we have to pay the price with a little weakness for some time for things to recover. It’s like overeating at a lunch buffet, sometimes you just skip dinner.

What are your thoughts?

{ 52 comments, please add your thoughts now! }

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52 Responses to “Your Take: Is Your Recession Over?”

  1. thunderthighs says:

    The answer at my local bar was a resounding “NO.” More specifically, what does the pronouncement of some obscure bureau mean to “real” people in real life? Not much.

  2. DIY Investor says:

    If you’re asking whether I think the economy is moving up rather than down then the answer is yes I believe the recession is over. Consumers are spending, the housing market seems to have bottomed and jobs are being added. Are there people out of work, houses being foreclosed on, and businesses struggling? Sure but this is the case every time we come out of a recession.
    Could we go back into a recession,i.e. experience a double dip? Sure, but to me that’s a separate question.

  3. Traciatim says:

    For the actual definition of recession, yes it is over. That doesn’t mean things aren’t still bad out there, just that the economy has stopped contracting for now.

    • DIY Investor says:

      I agree things are bad out there if you don’t have a job and for many businesses. If you have a job, are in the market to buy a house, looking to refinance your mortgage,or looking for deals it is a great environment.

  4. billsnider says:

    The number of Americans in manufacturing has declined every year since 1971. Until you reverse that trend, we were, are and will be in a recession.

    Bill Snider

    • cubiclegeoff says:

      Old style manufacturing is on the way out and won’t get back to its peak. New manufacturing (software, education, etc.) is the future of the country.

      • billsnider says:

        As some one said to me recently, this is a new economy with new economic lasw. Sure. Keep believing that. Manufacturing of hard goods is wealth and power. without it you see a country going deeper into debt and losing much of its muscle.

        Bill snider

    • aua868s says:

      till manufacturing job are being outsourced to China or other countries, manufacturing would never come back in the USA.

      • billsnider says:

        China is experiencing high inflation at the present time. it is only a mttter of time before wages begin to rise and the cost of goods go up with it as well. So don’t take a static view on this issue.

        Bill Snider

        • Jin6655321 says:

          I agree that China’s wages will soon rise, that’s inevitable, but outsourcing will just be moved to another cheap country and prices will remain low. Remember the 80’s when Made in Korea was the symbol of cheap outsourced goods? Korea became too expensive and now it’s China. Most clothing are being outsourced to Indonesia and Bangladesh now. Within the next few decades I think Africa will become the new Asia in terms of outsourcing.

  5. cubiclegeoff says:

    Technically, yes. Emotionally, no. And if people think that the recession will be over when things get to “normal” (i.e., how things were before the recession), I’m not sure we want that. To get back to something really normal, well it took years to get to this point, it’s going to take years to get back (hard to swallow considering we have a society with that is short-sighted and wants everything now).

  6. Darin H says:

    Yes, the recession is technically over. We, however, are not recovering yet. We’ve seem to hit a ‘new’ normal of lower growth (around 1% GDP) and higher unemployment (not coming down anytime soon until we start adding 300K jobs per month). Weekly jobless claims are still hovering around 450K/week and that needs to drop to about 350K/week. When we see those number start to improve, then we’ll be on our way to recovery.

    • DIY Investor says:

      GDP growth doesn’t necessarily require job growth. My fear is that we have entered a new period where we’ll have difficulty getting unemployment below say 8% and the economy still grows at 3% or so. In the recent past the unemployment rate got considerably below 8% because there was a decision to allocate resources into the housing market – a lot of jobs that require minimal education. Now we have jobs that require education but a big part of the labor force is undereducated for those jobs.
      At least that’s my take.

      • cubiclegeoff says:

        Agreed. There are supposedly jobs out there with no one to hire because of a lack of education. However, I don’t think corporate America does a great job letting high school/college students know what those jobs are.

  7. Martha says:

    One thing that I noticed about two weeks ago was that at our local mall about 1/6 of the stores had “now hiring” signs up in the window. I was surprised to see the signs but excited to see some opportunities popping up in our town.

  8. Ron says:

    My statistics professor in grad school summed it up best: “Figures never lie, but liars figure.”

  9. daenyll says:

    by the numbers and technical definition we are done with that recession, but the prerecession “normal” was not truly normal economics and I don’t see(and hope not to see) a return to such bubble growth for a while. I am actually heartened to see housing dropped. Does it suck for everyone that bought in high with big dreams of even higher values, YES. But as I’m in my mid-20s, I was seeing housing values during the pre-recession that basically would have priced me out of any chance of owning property if they had continued growing. I now see values that might be reasonably attainable once I obtain a fulltime career position with my degree and get a little more of a downpayment stashed away.

  10. Michele says:

    Yes, of course the recession is over. The size of the American economy is no longer shrinking. In fact, it’s growing. However, it’s doing so at a snail’s pace.

    For people who are out of work and would prefer not to be, this adds insult to injury, as there are some sectors of the economy where the recession is but a distant memory – specifically those sectors that played the largest role in the unraveling. In fact, the CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million on average in 2009.

    Personally, I’m seeing signs of recovery all around me. I’m blessed to live in a state that has weathered the recession fairly well in the first place, with unemployment never climbing above 8%. I’m not sure the same can be said for states like Michigan, where my parents live. Likewise, I’m not sure the same can be said for specific sub-segments of the population, including those without a college education or skilled labor training – those who make up the greatest percentage of the unemployed.

  11. Mike says:

    If the GDP growth numbers were positive for two consecutive quarters, the recession is over.

    The other numbers like unemployment and consumer feelings always lag the broader economy. The recession has to be over for a while before jobs open up, which leads to more people willing to spend their money. Stocks are also the worst measure because they lag by more than employment. People don’t invest when they aren’t working or when they’re afraid they may lose their job soon.

    You can’t base it on how things “feel” or you’d always have a segment of the population claiming recession or boom.

  12. Yana says:

    No, I don’t believe that the recession is over. But since it’s officially been declared to be over, I guess it will be called a “double-dip” recession. My guess is that the housing market will fall another 30%. We can’t know where the bottom is until it begins to recover, but that beginning (in order for me to believe it) will be around 9 months of values rising. There is an ever-growing inventory of homes that the owners cannot sell, and where I am, property owners are losing money and in big trouble. In the “Rent Forever…” post, someone pointed out that renting is better *if you can find a good rental*. And that is what we are seeing here – no good rentals. We are looking at everything, even mobile homes which we consider renting even if bought, because we do hope to change residence as soon as the best deal appears.

    • Mike says:

      Housing prices are independent of the recession. Falling home prices is a result of several factors:
      1) home prices are overinflated
      2) market is saturated – too much inventory
      3) loans are too hard to obtain
      4) demand is low because of fear

      Home sales is the one sector of the economy that is truly a supply and demand issue. Prices sky-rocketed in 2005/2006 because of low supply. Prices are falling because of excess inventory on the market.

      The economy will likely be booming in the next 12 months and housing prices will lag behind by 6 months or more (average time it takes someone to find a home, bid, negotiate, and close).

      • live green says:

        I agree. Housing prices were way too inflated and too many people bought houses that weren’t supposed to. That is going to take time to adjust regardless of how the rest of the economy does.

  13. Janet A. says:

    Since the government controls the definition of “recession,” it is technically over when they say it is. But that definition is divorced-much like government officials-from the experiential reality of most working people. The recession is not over in any meaningful way if people cannot get jobs and their standards of living continue to decline.

    • Mike says:

      Gov’t doesn’t control it, they just measure it.

      Does the weatherman control the temperature outside?

  14. Paul says:

    No. What is this report from a non-partisan organization based on empirical data mean anyway?

    I’ll take my facts from the tea party, thank you very much.

    Palin 2012!

  15. bloodbath says:

    The recession is not over for most people.
    The ‘technical’ declaration of the end is hogwash.
    And if true, I propose that another recession began the very next day.
    I believe the declaration was made to fool the consumer to return to extra spending and for merchandisers to raise prices to increase share holders’ dividends.

  16. otipoby says:

    I would say that things certainly are not as bad as they were last June, but boy is it taking a while to get the economy back on it’s feet.

  17. tower says:

    Recession over? Gimme a break. The unemployment rate in the construction industry is some 30% and expected to increase over the next 2 years. 220,000 new jobs created this year in the US, (while still losing millions of existing jobs) and more than half of those in ONE state. Labeling this recession as over is politics at its best.

    • freeby50 says:

      Unemployment in construction is 17% right now down from a peak of 27%. I’m not clear on what you’re saying about millions of jobs. We did NOT loose millions of jobs this year. Unemployment #’s have been relatively flat over the past 12 months but trending down. In Oct 2009 there were 15.6M unemployed and in Aug 2010 there were 14.8M.

  18. T says:

    My opinion:

    The economy doesn’t get any better if everyone thinks it’s going down the toilet. So the government takes every opportunity to say, “no, things are really getting better now! really! pay no attention to the absence of jobs behind that curtain! pleeeeease don’t tank the market – we’re running out of bailout money.”

    Sorry, not convinced. But would be glad to find out I was wrong.

  19. Raymond says:

    People need to understand that a recession is actually the business cycle only while it is on a downward trend. The economy is very slowly improving and has been for a few quarters now. Therefore, yes the recession is over. Although, we do not see a better economy yet, it is working its way up the business cycle.

  20. melogos says:

    It appears as though the headline for the NBER finding has been misappropriately labeled. Scarcely anyone in middle America would agree that the recession has ended. According to their findings, a more descriptive headline could have read: “An Economic Trough Occurred in June 2009.” Has the recession really ended, or have we more accurately simply turned the corner to a more favorable economic climate? It seems that only yesterday the “experts” were talking of a “double-dip recession.” One may remember that the current recession was not identified as a recession until we were almost a year into it. One wag responded by asking: “If the recession is over, then when did the depression begin?” Technically, the NBER’s Business Cycle Dating Committee is probably correct in their assessment. However, there are tens of millions who would take issue with the headline proclaiming that the recession has ended. blog writes about millions who have lost jobs and have given up on the American dream as a result of their dismal financial situations. While the recession is not over, things are beginning to improve for many people. For that we can all be grateful!

  21. lostAnnfound says:

    Not for us. My husband lost his job earlier this year and has only been able to find part time work (about 30 hours per week) working on a dock/warehouse nights at a rate about 30% less than he was previously making. The want ads here have slim pickings and when he goes to apply for a full-time job newly listed there are so many more people doing the same thing that it makes it extremely competitive. Too many still struggling so that on a personal level I would say…NO

  22. freeby50 says:

    Yes the broad recession is over.

    Unemployment is still bad of course.
    Unemployment and recession are not the same thing. They are related but not equal.

  23. vlknh says:

    I was laid off in Oct 08, & rehired in Aug 09. My company after laying of about 1/2 of it’s work force is now thriving & hiring left & right.

    On the other hand, we need to make some pricey repairs on our home. But lost about 1/4 of it’s value just this year & we have no equity, so an equity loan is out of the question.

  24. Elloo says:

    No, no and no. It took how long for the so-called experts in suits to declare that there was a recession? Well past what the rest of us already knew. They can declare all they want that it’s now over, but the rest of us know better. My industry is still laying off people left and right by the thousands. Over? Hardly.

  25. I like your football analogy! As you said, by the official definition we are out of a recession – and will go into a new one. However, there is one huge flaw in that definition.

    Officially, you need 2 straight quarters of negative GDP growth in order to have a recession. So, if you are comparing Q1 2008 against Q1 2007 for example, you’ll see negative numbers. However, compare Q1 2010 against Q1 2009 and you’ll see a difference. But people are still looking for the good times of the middle of the decade where everyone was a real estate superstar and the money and loans were endless. So, with high unemployment and a housing market that is YEARS from recovery, we are not out of the recession. We just hit rock bottom and are now just above rock bottom!

    • Mike says:

      The GDP growth is not measured relative to another quarter. It is measured independently only considering the changes during the quarter in question. You can do comparisons from a year ago, but those comparisons are not the definition of recession/recovery.

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