Great Recession ended last summer, however expansion economic downturn proceeds
by, 10-07-2010 at 06:22 AM (5744 Views)
Recession is a technical term that technically does not apply to what the United States is presently going via. Economic misery as a real-life condition persists, but a government panel announced Monday the recession officially finished in June 2009. The economic downturn started in December 2007 and lasted for 18 months -- the longest slide since World War II. The economy's prolonged freefall had earned it the title of "Great Recession" long before it was officially announced over. The economy is growing, but that doesn't mean it will be back to normal anytime soon. The unemployment rate may never be taken care of if the economy does not increase faster. This "growth recession" is exactly what the Federal Reserve is trying to prevent.
Resource for this article - Great Recession ended last summer, but growth recession continues by Personal Money Store.
Recession runner up to Depression
The longest recession since the Good Depression ended when the economy resumed growth a year ago, according to the National Bureau of Economic Research. The Los Angeles Times reports that a relapse, or double-dip, would be a new recession. The Great Recession is second to the Good Depression in length. The Recession was only 18 months while the Depression was between 1929 and 1933, making it 43 months. The most recent economic collapse eclipsed 16-month recessions in 1973-75 and 1981-82. There were over 8 million people with job losses. The recovery of the labor market may be too slow. Since output was sustained with productivity expansion, jobs were lost which is why the NBER claims one of the most damage originated from.
Numerous on the street show the Recession is alive and well as it has finished on paper
Last Spring, the NBER has a warning to give. They said that any expansion being seen may just be too small. The Washington Post tells us what a recession is defined as. This is defined by NEBR as "a period of falling economic activity spread across the economy, lasting more than a few 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. Until December 2009, employment wasn't expanding. According to the NEBR, just since the end of the recession was announced does not mean conditions are getting better.
Growth recession details
The growth economic downturn is shown as the unemployment rate weakens while the economy expands. Economic expansion was at 3.7 percent within the first quarter of 2010, says Bloomberg. It then dropped to a 1.6 percent annual rate for the second quarter. A 5 percent rate of expansion was shown in 2009's fourth quarter. This made many people less worried. An unemployment rate stuck at 9.5 percent and above is stifling the consumer spending the economy needs to grow. The economy could be aided with tools Fed chairman Ben Bernake states he has. With interest rates near zero, some think the next step for the Fed is to purchase more Treasuries, or government debt. Others believe severe unemployment is the result of Americans lacking the skills to fill accessible jobs -- a problem monetary policy can't fix.
Los Angeles times