In technical terms, we can’t call what the United States is now going through an economic downturn. Economic misery as a real-life condition persists, however a government panel announced Monday the economic downturn officially ended in June 2009. Since World War II, we have not had a recession as long as this one. It began in December 2007 and went for about 18 months after that. Before the economy’s hard times ended, it officially became called the “Great Recession”. The economy isn’t expected to go back to its normal state within the near future. Of course, it has continued growing though. The Federal Reserve is doing anything it can to prevent a “growth recession” from occurring where the economy doesn’t expand fast enough for unemployment.
Recession runner up to Depression
The National Bureau of Economic Research says that the longest recession since the Great Depression ended last summer when the economy began to grow again. The Los Angeles Times lets us know the recession is totally over. This means it would be a new recession if a double dip were to occur. The 18-month Great Recession is the official runner up to the 43-month Great Depression that lasted from 1929 to 1933. There were two recessions tying for 3rd place. These were in 1973-75 and 1981-82. More than 8 million individuals lost their jobs, and the labor market could take years to recover. Since output was sustained with productivity growth, jobs were lost which is why the NBER states one of the most damage came from.
Recession ended on paper, however not on the street
The expansion that is being seen may not be enough to do anything, states NBER. NEBR defines an economic downturn as, as outlined by the Washington Post, “a period of falling economic activity spread across the economy, lasting more than a couple of months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales.” According to the panel, GDP and industrial production bottomed out in June 2009. There was no expansion in employment for a long time. It didn’t pick back up until December 2009. The NEBR said that by declaring a specific date for the end of the recession it was not saying that economic conditions are favorable since then.
All about growth recession
The economy seems to be getting better in an expansion economic downturn. During this whole time, the unemployment rate proceeds to go up. According to Bloomberg, In the first quarter, there was a 3.7 percent growth while it dropped in 2010’s second quarter to a 1.6 percent annual rate for economic growth. A 5 percent rate of growth in the fourth quarter of 2009 raised hopes that economic recovery was gathering steam. An unemployment rate stuck at 9.5 percent and above is stifling the consumer spending the economy needs to grow. Fed chairman Ben Bernake said the agency has the tools to aid the economy. Numerous think the Fed should buy more government debt or treasuries since interest rates are near zero. Ot! hers believe severe joblessness is the result of Americans lacking the skills to fill available jobs — a problem monetary policy cannot fix.
Additional reading
Los Angeles times
latimes.com/business/la-fi-recession-20100920,,4014811.story
Washington Post
voices.washingtonpost.com/political-economy/2010/09/its_official_the_great_recessi.html
Bloomberg
bloomberg.com/news/2010-09-19/escaping-double-dip-to-growth-recession-means-no-unemployment-relief-seen.html
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