When Will the Recession End?
Believe it or not what has become known as "The Great Recession" has been going on for a couple of years now, although economists refused to call it a recession for almost half of that time. So when will it end? No one knows for sure, but I have seen media reports that the recession is already over. I think that is wishful thinking. Anyone can see that the economy is still doing very poorly here in the United States. But how will we know when the recession is really over?
There are several things that economists look for when determining if a recession is over. Because they officially declare a recession after the economy has been doing poorly for two quarters, (they usually wait a quarter or two longer though) they tend to look for the economy to be improving for the same amount of time. Which is why I think the media has wishful thinking - the economy so far is not really improving yet. There needs to be moderate growth instead of a decline.
The economy needs to stabilize in order for the recession to officially be over. The stock market needs to recover a good bit of what it lost. There needs to be an increase in the gross domestic product, not a decrease. The housing market needs to recover as well. For awhile now we have seen the housing market remain stagnant. There has been way too many homes on the market and nothing seems to be selling. Home values have declined tremendously. Once these homes start selling again and the values stabilize, that is a good sign pointing to the end of a recession.
One of the factors of a recession that always grabs national headlines is the unemployment rate. It has been in the double digits now for awhile. Unfortunately the unemployment rate is one of the last areas to recover from a recession. So the economists tend to look for this rate to stabilize or maybe improve just a little bit.
From the very beginning of The Great Recession the economists have said that they expected the recovery to start towards the end of 2009. As much as I would like this to happen, to me it doesn't look like it will. There are still too many factors pointing towards a recession, not a recovery. But the fact is - it will happen eventually. We have always pulled out of recessions in the past and we will again.
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