Is the recession really over?
Jennifer McClelland | RSS | 2 Comments
On September 15th Ben Bernanke said that the recession is basically over in a statement that rang so loudly, the stock market shot up like a weed after a rainstorm. Well, it was just over half a percentage point for the Dow today, but up is up, right (I really just wanted to use an illustrative language today and that was what came to mind also)?
So, on top of Bernanke’s statement about the recession being over, there was also new data to come out that said consumer sales were up. Sales rose in the past month the most they had risen over a single month in three years.
All of this news put together made for a pretty good day on Wall Street, but the statement about the recession being over was what made headlines that day. So, do I feel like the recession is over or that it may as well be over?
I think we may have seen the bottom. All indicators are pointing to the fact that we have bottomed out. The Dow Jones Industrial Average is well above the lowest point of the year and the overall stock market is doing well. Job losses have slowed down (although unemployment continues to increase). Consumer spending is starting to climb back up, homes are beginning to pick up in sales (and in return the amount of existing homes on the market is finally beginning to decline), and new construction has started once again on projects all across the country. Even auto sales have been kind of stirred after the Cash for Clunkers program.
But before we can all pack up our briefcases and drive to TGI Friday’s for Happy Hour, we have to remember something, it’s not over until it’s over and there are plenty of people out there who don’t have jobs and can’t pay their mortgages. I hate to be a buzzkill for those who felt like celebrating when Bernanke said the recession was basically over, but there are so many things still going on not only in the U.S. but all around the world that show the global recession is not over and that it will be a long road to go down before we actually see the end (and by the end, I mean economic growth like we were seeing prior to the beginning of the recession).
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Tags: dow jones industrial average, unemployment, stock market
Peter Luke | Wed, Sep 16 2009
I couldn’t agree with you more. It isn’t over until it’s over. We have lots of catching up to do. But over and above all this, I hope that we don’t let this experience pass without learning a thing or two. Recession undeniably kept us on our toes, made us think twice about spending our dollar, had us devise some tricks on how to work around our grocery lists and so on – great wake-up call that shouldn’t go amiss.
Steven from Kangaroo Self Storage | Mon, Oct 05 2009
A shrewd article Jennifer. There’s still far too much consumer, corporate and government debt to believe the recession is over. Hopefully we’ve bottomed out and are on the road to recovery, but things are too fragile to believe there won’t be problems ahead. In the UK, government debt is eye-wateringly high and taxpayers have yet to understand the burden this will place on them for years to come.