Is the Recession Over?

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“The recession is very likely over at this point.” (France24)

Ben Bernanke, Chairman of the US Federal Reserve, made that formal announcement on Tuesday. Media sources are debating if it really is the case. Some however, say that effects of this optimism alone, is good, especially for the stock market. We take a look at perspectives from France24, Tech Ticker, Slate magazine, The New York Times and CNN.

A reporter from France24 supports Bernanke’s claim.

“Indeed there is cause for optimism. US retail figures, boosted by a 10 percent rise in car sales, climbed 2.7% in August.”

Economist Nouriel Roubini disagrees, citing figures to support his point. He speaks with Tech Ticker, a technology blog.

“When the NBR decides whether the recession is over, they don’t look at 2 percent this quarter of GDP growth, the look at other indicators.. production, unemployment and so on..sales. And based on those indictors, actually the end of the recession is not going to be Q4 of this year, but we may have positive growth of Q1 of next year or sometime next year. This could be more like a 36-month recession rather than a 24-month recession.”

Emily Bazelon, a writer for Slate magazine, is just as pessimistic about the economy. She speaks people-on-the-street, who say they aren’t celebrating with Bernanke. One of them says:

“If the recession is over for some people, I must not know them.”

Bazelon agrees, saying,

“When the real end of the downturn comes, Bernanke won't need to tell us. We'll see it for ourselves.”

The New York Times and CNN give a different view. They say that effects of Bernanke’s optimism are showing on the stock market.

“For weeks, many of Wall Street’s hopeful voices have been calling the end of the recession. And when the Federal Reserve chairman, Ben S. Bernanke, said the same was ‘very likely’ on Tuesday, his comment helped stock markets rise to highs for the year.” (The New York Times)

“On Wall street, stocks are rising to their highest levels in nearly a year. Yesterday, Ben Bernanke said the recession is likely over, and today, new economic reports are supporting that view.”
“The Dow is now up 10 percent for the year, the S&P 500 is up 16 and a half percent for the year. The NASDAQ is up, wait for it, 33 percent for the year.” (CNN)

The statement by Bernanke has elicited different responses. We want to know what you think.