The National Bureau of Economic Research has announced that the recession officially ended in June 2009. Their analysis says it began in December 2007, lasting 18 months, making it the longest U.S. recession since the World War II era. But what does that all mean for the still deeply troubled U.S. economy and the job market?
How They Define the Recession's End The Washington Post's Neil Irwin explains, "The designation of June 2009 as an end date for the recession conforms to a view that many economic analysts have held for some time. According to the committee, such indicators as gross domestic product and industrial production appear to have bottomed out in June 2009. Others, however, particularly involving employment, did not begin expanding until December 2009." However, "The committee took pains to make clear that it was not asserting that the economy has returned to full health. ... In other words, economic activity peaked at the end of 2007, fell for a year and a half, and has been rising since then. But it hasn't risen back to its pre-recession levels yet."
- Believe It or Not, Things Are Improving The Big Picture's Barry Ritholtz writes, "No, we are not still in a recession as some people have asserted. No, its not a depression. The wheel has turned, the trough is more than a year behind us. This is not a robust recovery, but the economy is now expanding, not contracting. If you are unsure of this, consider the charts of the 5 major economic factors the NBER considers in their dating criteria below." Ritholtz reproduces several compelling charts illustrating his argument.
- No Good News Here Outside the Beltway's James Joyner sighs, "This isn't exactly news, in that we've been pretty confident for some time that the technical end of the recession happened last summer. And, frankly, the announcement is likely to be met with sneers from the general public, what with the flatness of the recovery and the fact that the miserable jobs picture isn't clearing up anytime soon. The prospect of a 'double dip' is particularly unwelcome. ... A lot of the jobs that went away during this crisis are simply not coming back. And it's not clear what's going to replace them in the short- or medium-term."
- Job Market Remains Deeply Troubled The Economist's Ryan Avent writes, "What's important to understand is that this is a technical finding, indicating that a specific trough has come to an end and that any subsequent, sustained decline would be labeled a new recession. Obviously, the employment picture is still dismal, and people complaining that policymakers should focus on labour markets rather than output have a point. It's just not one that's particularly relevant to what the NBER Dating Committee does."
- Proves Stimulus Worked The Washington Monthly's Steve Benen writes, "I don't imagine many folks will be especially excited by the announcement -- indeed, much of the country likely perceives the recession as ongoing -- but when it comes to official measurements, I suppose it's at least somewhat encouraging to know the modest, slow recovery began about six months after the Recovery Act started pumping capital into the economy. As for the debate over tax rates, the argument that we can't allow higher rates to return for the wealthy in 'the middle of a recession' is wrong for a variety of reasons, not the least of which is that this isn't 'the middle of a recession.'"