The term recession technically does not apply to the United States in its current state. Monday, the government announced that June 2009 was when the economic downturn officially finished, even though the economy is still terrible. This has been the longest slide since World War II as the economic downturn lasted 18 months after beginning in December 2007. Before the economy’s hard times ended, it officially became called the “Great Recession”. The government said that the economy will not be returning to its full capacity for a while although it is growing again. The unemployment rate may never be taken care of if the economy doesn’t expand faster. This “growth recession” is precisely what the Federal Reserve is trying to prevent.
Differences between Recession and Depression
The National Bureau of Economic Research says the longest economic downturn since the Great Depression ended a year ago when the economy began to grow again. The Los Angeles Times lets us know that the recession is totally over. This means it would be a new economic downturn if a double dip were to occur. The 18-month Recession is the official runner up to the 43-month Good Depression that lasted from 1929 to 1933. The most recent economic collapse eclipsed 16-month recessions in 1973-75 and 1981-82. The labor market may not recover fast enough as 8 million lost their jobs. Since output was sustained with productivity expansion, jobs were lost which is why the NBER says one of the most damage came from.
Economic downturn may look over, however obviously is not
The NBER warned last spring that what seems to be an expansion could be a blip in a long-term contraction. The Washington Post reports that the NEBR defines an economic downturn 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.” Since June 2009, GDP and industrial production entirely bottomed out. Until December 2009, employment wasn’t expanding. The NEBR said that by declaring a specific date for the end of the economic recession it was not saying that economic conditions have been favorable since then.
Interesting facts about the expansion recession
The economy is apparently getting better in a growth recession. During this whole time, the unemployment rate proceeds to go up. Bloomberg reports that economic growth slowed in 2010 to a 1.6 percent annual rate in the second quarter from 3.7 percent within the first quarter. A 5 percent rate of growth in the fourth quarter of 2009 raised hopes that economic recovery was gathering steam. A joblessness rate stuck at 9.5 percent and above is stifling the consumer spending the economy needs to grow. Fed chairman Ben Bernake states the economy may be healed. This would take tools the agency has. Many think the Fed should buy more government debt or treasuries since rates of interest are near zero. Many people think that people just need jobs. This would help America’s economy a lot.
more info on this subject
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
