Let the unemployed rejoice – the recession is over! Well, at least that is what the National Bureau of Economic Research (NBER), a group of independent economists, is suggesting. The United States has had a steady declining economy for the past 18 months. But, with unemployment lines wrapping outside of buildings and foreclosure signs appearing in the front yards of your neighbors’ homes, could this recession really be over?
On Monday, the NBER released a statement claiming data show that the economy revived itself last summer. Although the economy is gradually lifting itself from its slump, the NBER states it “did not conclude [from its findings] that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity.”
Most economists have agreed with NBER and have said that the recession has likely been ebbing since summer 2009. Barry Ritholtz, CEO of Fusion IQ, a research firm, states that “this is not a robust recovery, but the economy is now expanding, not contracting.” If the economy has been improving since last summer, why is this the first time the American public is hearing about it? NBER said that is a long process to declare the start or end of a recession. All economic data needs to be revised and reviewed, which means a recession cannot be declared until a year after the initial decline.
Despite the beliefs that the 18-month recession is over, there is still talk of a double-dip recession. This could mean that a second recession of the same or greater severity could surface. Although double-dip scenarios are rare, they do occur, as they did in 1980 and from 1981-1982.
Many economists believe that the $787 billion Recovery Act neither helped nor hurt the country’s economy. The goal of this Recovery Act was to save or create 3.5 million jobs by the end of 2010. However, with unemployment continuing to rise, it seems as though the expected target may not be reached. Although many economists have stated that the stimulus bill President Obama passed has been ineffective and more harmful to the declining economy, I think that it has helped tremendously. Mark Zandi, chief economist of Moody’s Analytics, spoke the truth when he said, “Without that response, we would have suffered a 1930s-style Great Depression.” If Obama did not sign the stimulus bill, the economy would still be on the decline and the recession would not be over.
While surviving through the recession proved to be difficult, the struggle is not over quite yet. This is a long-term project that will constantly need special care and attention, and with almost 15 million people unemployed, it will become a lengthy one.
Throughout the last 18 months, the recession has produced 14.9 million unemployed workers and 861,664 houses have been lost to foreclosure. Knowing these numbers, it is hard to believe that the economy has been recovering for more than a year.
Sophomore political science and history major