(Thumbnail image: Cleveland Leader)
BY JIM FLINK
“As you all well know, a number of economists and market watchers had issued their own personal opinions that the recession had officially ended. Now that the NBER has come out we can officially say that the recession ended in June 2009.” (Bloomberg)
Ok, so it’s not exactly an economic bombshell. But news that the recession has been over for more than a year was enough to spur the stock market into a bit of a rally. And to appease a dark mood hanging over the economy.
We’re analyzing reaction to the news from Bloomberg, the NBER, NPR, CNBC and the L.A. Times.
The recession officially lasted 18 months, making it the longest economic downturn since the end of World War Two. Here’s how the National Bureau of Economic Research committee defines a recession, and when it ends.
“A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle.”
A Planet Money blogger for NPR asks, if the recession ended more than a year ago, how come it still feels like the economy is a mess?
“So what the committee is saying today is that the economy stopped getting weaker in June of last year. But there's a big difference between ‘stopped getting weaker’ and ‘returned to health.’"
Indeed, an optimistic analyst on Bloomberg says, this becomes a waiting game. While all eyes will turn to the Fed, which is evaluating whether to go through a second round of quantitative easing, it may decide to do nothing and let a recovery spawn slowly.
“It looks like the economy has firmed up since the Fed met. Not so much that there’s any need for a major change in policy. ... Really the Fed doesn’t have a whole lot of tools other than quantitative easing."
Meantime, the blue mood continues. On CNBC, Larry Kudlow and Steve Liesman debate whether inflation is still a worry moving forward.
LIESMAN: "I think tremendous slack in the economy speaks to me of continued low inflation. I know you disagree with that idea."
KUDLOW: “No, no. I appreciate the debate. I just wanna say, I acknowledge that the CPI evidence is running completely against my easy money theorum. I acknowledge that. I think that will change, that’s all I’m saying."
LIESMAN: “You need a transmission mechanism though Larry. That’s really the key part of the debate. Is, how do you translate the amount of money on the Fed’s balance sheet into higher inflation. It’s gotta be through wages, through some form of cost pushing initialization, we have no evidence of it right now would be my point.”
Even with this small bit of good news, the LA Times notes, there are lots of indications the economy may be heading for another recession, if it’s not already in it.
“With the housing market still depressed, and the official unemployment rate near 10% and jobs growing very slowly, many economists are concerned about the possibility of the economy lapsing into another recession.”
So, what do you think? Slow rebound? Or double-dip?
Get more multi-source business and U.S. news from Newsy.com.
