Economists wonder if recession actually ended

posted at 10:12 am on April 13, 2010 by Ed Morrissey

The Obama administration has insisted that its economic policies provided the basis for the end of the Great Recession in the third quarter of last year.  National media repeat the assertion to the point that almost every story about negative economic developments uses the word “unexpectedly.”  Yesterday, the National Bureau of Economic Research challenged the underlying assumption and refused to state that the recession ever ended at all:

The National Bureau of Economic Research, a nonprofit group of economists, determines when recessions start and end as part of its work in calculating the peaks and troughs of the business cycle.

The bureau’s Business Cycle Dating Committee met last Friday and concluded that the jury is still out on the recession’s end, announcing that decision on its Web site Monday.

The committee reaffirmed that the recession began in December 2007, but its seven members couldn’t determine whether the recession has ended.

“The trough date would identify the end of contraction and the beginning of expansion. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature,” the committee said in a statement. “Many indicators are quite preliminary at this time and will be revised in coming months.”

The big sticking point is the unemployment rate.  The US has record levels of long-term unemployed workers, and the rate of job growth remains too low for economic expansion.  The NBER fears that the burden of the massive numbers of unemployed or part-time workers won’t support a recovery and that a double-dip recession may be on the horizon.

A forecaster from Moody’s wonders whether businesses will feel confident enough to expand, or find enough credit to do so, but misses one point.  Businesses won’t expand while the administration sends pricing signals of future higher taxes and cost burdens, or worse, of runaway inflation.  The expansion of the debt points to at least one of those scenarios as a certainty, and while Democrats spend wildly, businesses and investors will shelter their capital for the many rainy days they see ahead.

McClatchy isn’t the only media outlet sounding more skeptical about the recovery.  Today, the Washington Post also wondered how to reconcile the White House happy talk with the economic reality in the US:

But the buoyant talk has gotten far ahead of the reality on the ground of the American economy.

That great March job number, for example, received a short-term boost from temporary Census Bureau hiring and the rebound from February snowstorms, so the underlying employment growth was somewhere around 50,000 jobs — not the 162,000 that made headlines, and far below the 130,000 or so jobs needed to keep up with population growth. The number of people filing new claims for jobless benefits each week has remained stubbornly around 450,000, well above the levels expected in a hiring boom.

And while the stock market is up a lot, it has rebounded from generational lows. Much of the gains of the past year reflected the investors’ conclusion that the economy wasn’t going to collapse, not a harbinger of boom times ahead.

The U.S. economy will grow 3.1 percent this year, according to the consensus of forecasters surveyed by the Blue Chip Economic Indicators. That is far better than the steep declines of a year ago, but basically close to the long-term growth trend for the U.S. economy.

But that rate of expansion won’t be enough to pull the economy out of the deep hole it is in, given a 9.7 percent unemployment rate, and is merely enough to keep the hole from getting any deeper. By contrast, after the last recession of similar depth, in 1981-1982, the economy experienced five straight quarters of growth in the 7 to 9 percent range from the spring of 1983 through summer of 1984.

The stock market is also up because the dollar has gotten progressively weaker over the last couple of years, a point that most analysts fail to note.  As for hiring booms, the weekly initial jobless claim rate has to be around 300,000 just for break-even status.  Saying that 450,000 is “well above the levels expected in a hiring boom” is a broad understatement.  The 450K rate is at least twice as high as one would see in a hiring boom.

Recessions end when investor confidence returns.  So far, none of the economic data shows that to be happening, and the Obama administration’s economic policies are the main reason why.


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Don’t think so

Any “recovery” is businesses grabbing up the last opportunities of the Bush tax cuts before they expire.

blatantblue on April 13, 2010 at 10:12 AM

Uh, why don’t they just google the word recession and count the number of hits compared to last year?

jeff_from_mpls on April 13, 2010 at 10:15 AM

Don’t they announce “it turned around” just about every month?
Since I was an odd student and got my econ degree long ago, It seems to me that current economists are what we used to call Political science majors. They spin and fudge on data. 3.7 million jobs lost by Obama. He said after porkulus the growth would be 95,000 jobs per month.

seven on April 13, 2010 at 10:16 AM

I don’t understand why PBHO hasn’t pushed harder for Crap and Trade and immigration reform, those two measures would pull America from the recession and create millions of green jobs.

Bishop on April 13, 2010 at 10:16 AM

Just can’t wait for all those tax increases to begin….that should really help things along…

PatriotRider on April 13, 2010 at 10:16 AM

This is getting beyond hysterical funny…

tarpon on April 13, 2010 at 10:17 AM

Isn’t a recession considered 2 or more consecutive quarters of negative GDP? By that rationale, technically yes the Great Recession is “over”. The problem is the end of the recession has not paved the way for any type of economic recovery thanks to a lack of job creation or expansion by businesses. Instead, Obama’s policies are setting us up for a double-dip which will drive unemployment even higher.

Doughboy on April 13, 2010 at 10:20 AM

All I know is our income went down again this year.

jeanie on April 13, 2010 at 10:22 AM

Most people equate the economy as the stock market doing well. Since the stock market is at 11,000 people think what the heck all is good and there is nothing to worry about. The lamestream is feeding off of this. There is going to be a correction down the road to bad all of us who saw this coming during the election are along for the ride.

Brat4life on April 13, 2010 at 10:22 AM

Raise income taxes and extend unemployment benefits to 99 weeks and beyond.

What fracking fiasco.

This is what we get for electing as president a guy who has not held a private-sector job longer than a year. And even in one of those jobs–the ice cream job–Obama was spreadin’ the wealth by stealing from his employer and giving to his friends. In other words, Obama started practicing picking winners and losers from an early age.

BuckeyeSam on April 13, 2010 at 10:22 AM

Green jobs right around the corner. Ethanol plants are filing bankruptcy and wind turbine factories are doing layoffs.
The chief propoganda czar says general agriculture jobs have been reclassified and are now green jobs. I take it they were not green for Bush but now are upgraded.

seven on April 13, 2010 at 10:23 AM

Clearly democrats haven’t done enough if the economy is recovering. I voted for change, I voted for the utter tanking of the US economy. What good is my loyal democrat vote if it doesn’t destroy liberty and prosperity?

Inanemergencydial on April 13, 2010 at 10:24 AM

Lemme guess… if it did end, it did so “unexpectedly”.

ya2daup on April 13, 2010 at 10:25 AM

The economy may stabilize in 2011 depending on the mid-terms, but NO growth until 2013 when Obama is unseated. Mark my words.

royzer on April 13, 2010 at 10:27 AM

Most people equate the economy as the stock market doing well. Since the stock market is at 11,000 people think what the heck all is good and there is nothing to worry about. The lamestream is feeding off of this. There is going to be a correction down the road to bad all of us who saw this coming during the election are along for the ride.

Brat4life on April 13, 2010 at 10:22 AM

I don’t see a lot of people getting all giddy about the Dow being at 11,000. Even the drive-bys seem to be downplaying this. Probably because even they know the pain that’s right around the corner.

Doughboy on April 13, 2010 at 10:27 AM

The Recession is dead! Long live the Recession!

Jeff M on April 13, 2010 at 10:28 AM

Observe Japan over the past two decades. Did they recover from the 1990 crash? Because that is the path we are travelling.

Vashta.Nerada on April 13, 2010 at 10:29 AM

Doughboy on April 13, 2010 at 10:27 AM

I hear it all the time and these aren’t people who really follow poltics at all. They think the dow at 11000 is a good thing and the economy is better because of it. I’ll tell them the dow might be at 11000 but just because it’s high doesn’t mean the economy is going well.

Brat4life on April 13, 2010 at 10:29 AM

The stock market is also up because the dollar has gotten progressively weaker over the last couple of years, a point that most analysts fail to note

The analogy of the suit. A fine man’s suit is equal to an ounce of gold. whether it was $20 in 1880 or $1000 today. the only thing that changed was th value of the money, not the gold nor the suit.

Daveyardbird on April 13, 2010 at 10:30 AM

Still underemployed and looking for a full-time position, so I can confirm the economy does indeed still suck.

By contrast, after the last recession of similar depth, in 1981-1982, the economy experienced five straight quarters of growth in the 7 to 9 percent range from the spring of 1983 through summer of 1984.

Gee, I wonder why that was the case?

NoLeftTurn on April 13, 2010 at 10:31 AM

“Economists wondering”…..

While these useless intellectuals wonder, they could validate their expectations/assumptions/wonderment simply by strapping on a pair of shoes and walking down to the unemployment office or a random sample of local businesses. I’m certain all the wonderment would rapidly get changed into reality.

ted c on April 13, 2010 at 10:32 AM

Recessions end when investor confidence returns.


That will be on Inauguration Day, 2013.

GarandFan on April 13, 2010 at 10:32 AM

Don’t forget all the rosy proclimations of 6% higher sales than last year. NEWSFLASH: Last year was horrible and this year is 10% above horrible but still down 35% from 2008.

HAPPY DAYS ARE HERE AGAIN!

Only two pages of Trustee Sale Notices in a Tuesday newspaper.

HAPPY DAYS ARE HERE AGAIN!

The Feds are only $127 billion in deficit spending…this month.

HAPPY DAYS ARE HERE AGAIN!

jukin on April 13, 2010 at 10:33 AM

This painful embarrassment occupying the WH has no intention of allowing the recession to end. Rush covered this yesterday and was spot on with his analysis.

Transformation of America Progressive style…

Keemo on April 13, 2010 at 10:36 AM

Where are the jobs?

ted c on April 13, 2010 at 10:36 AM

I wonder how raising the taxes of those who make over 250k per year to 91% is going to affect the economy?

BPD on April 13, 2010 at 10:36 AM

Don’t think so

Any “recovery” is businesses grabbing up the last opportunities of the Bush tax cuts before they expire.

blatantblue on April 13, 2010 at 10:12 AM

This is widely predicted in the financial press. Expect the “double dip recession” to kick in come January 2011.

Who is John Galt on April 13, 2010 at 10:38 AM

The economy may stabilize in 2011 depending on the mid-terms, but NO growth until 2013 when Obama is unseated. Mark my words.

royzer on April 13, 2010 at 10:27 AM

Yep. This recession won’t end until we get rid of Barry Obama and his merry band of idiot thieves in Congress.

AZCoyote on April 13, 2010 at 10:38 AM

Here. Let me help you…

No.

UnderstandingisPower on April 13, 2010 at 10:39 AM

Where are the jobs?

ted c on April 13, 2010 at 10:36 AM

Your mistake is you keep looking in the private sector.

Doughboy on April 13, 2010 at 10:41 AM

Sorry, but they have to remove increased government spending from their “growth” column, simply because for every dollar the government stimulates the economy with, it borrows $0.50. Its called churn. It’s the false economy. Tell me, what happens when the government stops dumping cash into the economy? Will we be in recession again? Nope. You’ll just see it for what it really is. The true economy.

That ain’t growth. If it was, my wife would be singularly responsible for making me the richiest man on earth.

The only way increased government spending during a recession has a long term positive effect is if that cash is drawn from a surplus (rainy day account?), not borrowed. Borrowing only increases the debt load, and the interest payments on that debt suck out any hope of long term growth.

The US is suffering from a fiat economy.

BobMbx on April 13, 2010 at 10:43 AM

FDR turned a recession into the Great Depression. And we al know who one of Obama’s idols is…

brak on April 13, 2010 at 10:43 AM

Of course it has ended. According to the MSM, it ended at least a dozen times last year.

Daggett on April 13, 2010 at 10:46 AM

The only way increased government spending during a recession has a long term positive effect is if that cash is drawn from a surplus (rainy day account?), not borrowed. Borrowing only increases the debt load, and the interest payments on that debt suck out any hope of long term growth.

The US is suffering from a fiat economy.

BobMbx on April 13, 2010 at 10:43 AM

Wiser heads tried to warn us that fiat money would lead to a fiat economy. But now all we can do is sit and watch while the government plays a massive numbers game.

Dark-Star on April 13, 2010 at 10:47 AM

……..STANDBY FOR NEW FINANCIAL TERM………

We’re leaving recession, and entering Ocession.

OCESSION: What happens when tax cheats and community organizers are put in charge.

BobMbx on April 13, 2010 at 10:48 AM

Extend unemployment benefits to 500 weeks and everything should be fine…

PatriotRider on April 13, 2010 at 10:49 AM

Extend unemployment benefits to 500 weeks and everything should be fine…
PatriotRider on April 13, 2010 at 10:49 AM

Don’t be so shortsighted. Extend benefits forever, unlimited number of weeks with no requirements beyond opening the mailbox to retrieve the check.

Bishop on April 13, 2010 at 10:51 AM

Extend unemployment benefits to 500 weeks and everything should be fine…

PatriotRider on April 13, 2010 at 10:49 AM

You joke about it, but we’re already 20% of the way there.

Doughboy on April 13, 2010 at 10:51 AM

I guess those “green shoots” that Barry was bragging about got hit by a late frost?

JamesLee on April 13, 2010 at 10:52 AM

Only two pages of Trustee Sale Notices in a Tuesday newspaper.

HAPPY DAYS ARE HERE AGAIN!

jukin on April 13, 2010 at 10:33 AM

B of A and CITI expect that to change by the 4th quarter 2010. They say their REO’s will more than double.

chemman on April 13, 2010 at 10:53 AM

The policies are stifling whatever “recovery” that might otherwise be happening. Businesses are trying to avoid hiring unless they absolutely have to do it. Businesses are avoiding taking other new risks too.

forest on April 13, 2010 at 10:53 AM

Dark-Star on April 13, 2010 at 10:47 AM

The rationale for starting the FED was to stabilize the value of the dollar. That has really worked out well hasn’t it.

chemman on April 13, 2010 at 10:58 AM

Economists wonder if recession actually ended

The only safe thing to say is that it will end sometime after Global Warming ends.

MB4 on April 13, 2010 at 10:59 AM

Obama: If it wasn’t for George W. Bush, I would have never
had a shot at being president, Pelosi wouldn’t be speaker and Reid wouldn’t be senate majority leader! So if you don’t like the direction this economy is going, ask yourself,”What was I thinking when I voted for Bush?”

cartooner on April 13, 2010 at 11:00 AM

Do they really have to wonder?
That says something in itself.

ORconservative on April 13, 2010 at 11:00 AM

“The problem with socialism is that eventually you run out of other people’s money”
~M. Thatcher

We’re about to find out if this is true. And that’s unfortunate.

Disaster: Finding out if socialists are right…or wrong.

BobMbx on April 13, 2010 at 11:01 AM

Recession? What recession? Man, the economy is GREAT! I don’t know why all those racist people insist on saying that we are in a recession. Gee. /

cibolo on April 13, 2010 at 11:01 AM

Economists wonder if recession actually ended

Never let a crisis go to waste.

cntrlfrk on April 13, 2010 at 11:04 AM

How is the recession over? Let me explain it: Obama and liberals want us to be a European-esque social state and so high unemployment and a stagnating private sector are now to be considered normal.

gwelf on April 13, 2010 at 11:05 AM

Body Found in River

The Portland Oregon Police Department reports finding a man’s body in the Willamette River, just north of the Burnside Bridge.

The dead man’s name will not be released until his family has been notified. The victim apparently drowned due to excessive intoxication. He was wearing black fishnet stockings, a red garter belt, a strap-on sexual device, and an Obama T-shirt which said “Obama ended the Great Recession!”.

The police removed the Obama T-shirt to spare his family any unnecessary embarrassment.

(Making the rounds)

MB4 on April 13, 2010 at 11:08 AM

Here’s a stunning blog entry from economist Robert Reich:

Since the start of the Great Recession in December 2007, the U.S. economy has shed 8.4 million jobs and failed to create another 2.7 million required by an ever-larger pool of potential workers. That leaves us more than 11 million jobs behind. (The number is worse if you include everyone working part-time who’d rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they’re in.)

This means even if we enjoy a vigorous recovery that produces, say, 300,000 net new jobs a month, we could be looking at five to eight years before catching up to where we were before the recession began…

…What’s likely to slow the jobs recovery most, however, is the indubitable reality that many of the jobs that have been lost will never return.

The Great Recession has accelerated a structural shift in the economy that had been slowly building for years. Companies have used the downturn to aggressively trim payrolls, making cuts they’ve been reluctant to make before. Outsourcing abroad has increased dramatically. Companies have discovered that new software and computer technologies have made many workers in Asia and Latin America almost as productive as Americans, and that the Internet allows far more work to be efficiently moved to another country without loss of control.

Robert Reich is a notoriously liberal economist. Even he’s admitting that happy days aren’t here again.

Mike Honcho on April 13, 2010 at 11:11 AM

Economists wonder if recession actually ended…

LOL, do they?

Are these the same economists who have been routinely and recurringly surprised that economic indicators are ‘unexpectedly’ worse than they thought they’d be – every f-ing month?

Midas on April 13, 2010 at 11:12 AM

The un-Energized Bunny. It’s very depressing and if you have a job, regardless of what is going on, you have to stick with it. There is no where else to go.

Cindy Munford on April 13, 2010 at 11:12 AM

How is the recession over? Let me explain it: Obama and liberals want us to be a European-esque social state and so high unemployment and a stagnating private sector are now to be considered normal.

gwelf on April 13, 2010 at 11:05 AM

And to complete the transformation, he will ensure that our Supreme Court takes into account the cultural value of Sharia law.

BobMbx on April 13, 2010 at 11:17 AM

This is the Nancy Pelosi Recession… Businesses are forward looking enterprises, and the down-turns in the stock market and regional unemployment started about 3-6 months after Nancy took the gavel, as small businesses began planning retrenchment in the face of expiration of the Bush tax-cuts and a high probability of a hostile business environment in DC.

This recession won’t end until the gavel is wrestled from the clutches of the wicked witch of the west, and is sanitized from the caustic effects of botox… When businesses begin to feel the tide has shifted in the War on Prosperity, then an actual recovery will begin.

phreshone on April 13, 2010 at 11:21 AM

Robert Reich is a notoriously liberal economist. Even he’s admitting that happy days aren’t here again.

Mike Honcho on April 13, 2010 at 11:11 AM

He’s still avoiding or simply not acknowledging great swaths of additional evidence as to the ruinous affect liberal financial policy is having on the economy as well. He’s trying to blame it all on business owners, but guess what Robert – your philosophy’s policies are holding a gun to their head – don’t get pissed off when they react in a way to try to save their lives.

Midas on April 13, 2010 at 11:24 AM

Don’t be so shortsighted. Extend benefits forever, unlimited number of weeks with no requirements beyond opening the mailbox to retrieve the check.

Bishop on April 13, 2010 at 10:51 AM

You want me to walk all the way to the mailbox? Can’t you just direct deposit it for me?
/typical Dem

VelvetElvis on April 13, 2010 at 11:44 AM

This ain’t no recession. This is the new American reality.

bloviator on April 13, 2010 at 11:46 AM

The Obama administration has insisted that its economic policies provided the basis for the end of the Great Recession in the third quarter of last year. National media repeat the assertion to the point that almost every story about negative economic developments uses the word “unexpectedly.”

Of course, when the economic recovery of the 1990s began, in March of 1991 (that’s stats from the Fed, for you trolls), national media hushed it up, so they could get a Democrat elected President in 1992. It worked. “It’s the economy, Stupid”.

In 1999, the NY Times belatedly noted in an editorial that in fact the recovery had begun in March of 1991. Goebbels looked up and gave them all a thumbs-up.

Del Dolemonte on April 13, 2010 at 11:53 AM

Japan first launched on its Keynesian oddyssey 20 years ago, and it’s still more-or-less right where it started (demonstrating beyond any shadow of a doubt that it was indeed WW2, not FDR, that ended the Great Depression). Why would it be any different here? This is no longer a recession: This is the new normal. Hell, twenty years from now it might even be looked back upon as the good old days.

Blacklake on April 13, 2010 at 11:56 AM

“Why work when I can get £42,000 in benefits a year AND drive a Mercedes?”

Basil Fawlty on April 13, 2010 at 12:14 PM

Lol, ya beat me to it! I found that yesterday and never got to posting it. |8-/

Dark-Star on April 13, 2010 at 12:26 PM

Those of us who give attention to the Consumer Metrics Institute’s figures have been aware of a lingering problem on “the consumer side” of the U.S. economy.

http://www.consumerindexes.com/index.html

Kralizec on April 13, 2010 at 12:37 PM

This post is raaaaacist.

Physics Geek on April 13, 2010 at 12:59 PM

Why would any business owner hire when it’s almost certain any gains in revenue brought about will be immediately pounced upon and confiscated by Pelosi and Reid?

Sorry Barry, but human beings (not just us evil Americans) are not going to work our asses off, only to benefit others who are less fortunate.

It would be nice if we were all living Saints, but we’re not.

Not to mention, by the looks of all the millionaire/billionaire Democrat politicians (including yourself), you aren’t setting much of an example.

Are only lawyers and union bosses entitled to riches in Obama’s America?

NoDonkey on April 13, 2010 at 2:04 PM

People are basing recovery on how well the market is faring? I understand the market was booming in early 1929.

Oleta on April 13, 2010 at 2:18 PM

If President Bush had a Jobless Recovery, as claimed by the left, then President Obama has a KFC style, Double Down Jobless Recovery.

juanito on April 13, 2010 at 2:46 PM