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2010-09-21 13:27:52
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer
Mon Sep 20, 5:17 pm ET
WASHINGTON It turns out the recession ended more than a year ago.
Feeling better now?
The panel that determines the timing of recessions concluded Monday that this
one ended technically, anyway in June 2009, and lasted 18 months. The
duration makes it the longest since World War II.
It may be over, but you won't be hearing any cheers from the millions of
Americans who are struggling to find a job. Or are worried about the ones they
have. Or have lost their homes. Or are behind on the mortgage.
"Every single one of the individuals who wrote the report needs a serious
reality check," said Bob Johnson of the Queens borough of New York, who is 46,
had worked in communications and has been looking for a job for more than three
years.
Not that it's the fault of the academics in this case the National Bureau of
Economic Research, a group of economists based in Cambridge, Mass. It's their
job to declare when recessions officially begin and end.
Their finding is one that economic historians spend a lot of time pondering.
Politicians care, too. They don't want to be blamed for downturns that happen
on their watch.
One of those politicians is President Barack Obama, who inherited the recession
it began in December 2007, according to the bureau. Obama found little reason
Monday to celebrate that it had officially ended.
"The hole was so deep that a lot of people out there are still hurting," the
president, whose Democratic Party faces a likely setback in the midterm
elections, said at a town-hall meeting sponsored by CNBC.
Obama has made a point of noting small signs of progress in the economy, which
is growing slowly. Some Democrats have urged him to stop boasting about any
progress at all, for fear that it irks people who feel things aren't getting
better and makes politicians seem out of touch.
For Melody Brooke, a 55-year-old marriage and family counselor in Lewisville,
Texas, it didn't feel in her household as if the recession ended 15 months ago.
Her household finances were in shambles at the time.
"It felt like the heat of it for us," Brooke said.
Her outlook is starting to brighten. Her husband finally found full-time work
about a month ago. And Brooke's counseling business is picking up: She's on
track to make about $35,000 for the year.
For the rest of the country, the statistics are familiar and grim. Since the
recession began, 7.3 million jobs have disappeared. Nearly 2.5 million homes
have been repossessed. Unemployment is at 9.6 percent.
Since the technical end of the recession, the economy has been growing. But the
growth has been painfully slow.
How slow? The Organization for Economic Cooperation and Development figures the
U.S. economy will grow 2.6 percent this year. It would take growth twice that
fast to drive down unemployment by a single percentage point.
Unemployment usually keeps rising well after a recession ends. That's because
it takes time for companies to gain confidence in the economy, know that
customer demand will last, and add jobs.
But for the past few recessions, it's taken longer and longer for unemployment
to come down. In 1982, for example, unemployment peaked the same month the
recession ended. After the 2001 recession, the gap was 19 months.
This time around, it's been 15 months, and economists don't expect unemployment
to come down significantly anytime soon.
In part, that's because of how the unemployment rate is calculated. It's based
on a survey of households. Only out-of-work people who are looking for jobs are
counted as unemployed. Those who have quit looking out of discouragement aren't
included. As the economy improves, more of these people will start looking for
jobs and will be counted again as unemployed. That will drive up the
unemployment rate, at least for a while.
To make its call on the end of a recession, the bureau looks at the stats
behind the gross domestic product, which measures the total value of the
economy. Plus, it reviews incomes, employment and industrial activity.
The bureau pointed out that a downturn in the economy anytime soon would now
mark the start of a new recession. The last time that happened was in 1981 and
1982, most economists believe.
The last recession that lasted longer than this one was, well, something far
worse than a recession: The Great Depression. It included a downturn of three
and a half years, ending in 1933, and another lasting more than a year, ending
in 1938.
___
AP Writers Candice Choi in New York, Dave Carpenter in Chicago and Charles
Babington in Washington contributed to this report.