The recession is (officially) over
The bureau that dates economic downturns said it was the longest one since the Great Depression.
WASHINGTON - The longest recession the country has endured since the Great Depression ended in June 2009, a group that dates the beginning and end of recessions declared Monday.
The National Bureau of Economic Research, a panel of academic economists based in Cambridge, Mass., said the recession that began in December 2007 lasted 18 months.
Previously, the longest post-Depression downturns were in 1973-1975 and in 1981-1982, both of which were 16 months long. The Depression of 1929-1933 lasted 43 months.
The NBER decision announced Monday makes official what many economists have believed for some time - that the recession ended in the summer of 2009. But it won't make much difference to most people, especially the 14.9 million without jobs.
That puts the jobless rate at 9.6 percent, and Americans also are coping with scant wage gains, weak home values, the worst foreclosure market in decades and a stock market that is down $5.3 trillion from its high three years ago.
Recession and expansion dates are based on various economic indicators, including gross domestic product, income, employment, industrial production and wholesale-retail sales. The bureau's Business Cycle Dating Committee typically waits to declare that the economy has turned until well after the fact, when it has a longer track record of economic data to confirm a new trend.
The bureau took care to note that the recession, by definition, meant only the period until the economy reached its low point - not a return to its previous vigor.
"In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity," the bureau said. "Rather, the committee determined only that the recession ended and a recovery began in that month."
President Obama saw little reason to celebrate the group's finding.
Appearing Monday at a town-hall meeting sponsored by CNBC, Obama said times were still very difficult for people "who are struggling," including those who were out of work and many others who were having difficulty paying their bills.
"The hole was so deep that a lot of people out there are still hurting," the president said. It's going "to take more time to solve" an economic problem that was years in the making, he added.
The economy started growing again in the July-to-September quarter of 2009, after a record four straight quarters of declines. Thus, the April-to-June quarter of 2009, marked the last quarter when the economy was shrinking. At that time, it contracted just 0.7 percent, after suffering through much deeper declines. That factored into the NBER's decision to pinpoint the end of the recession in June.
Robert J. Gordon, an NBER dating committee member for more than 30 years and an economics professor at Northwestern University, said nearly every indicator the committee looked at simultaneously reached its low point in June 2009, which made that month a relatively easy selection as the official turning point. The main exception to this trend was the job market.
Unemployment usually keeps rising well after a recession ends, as employers refrain from hiring until they are fairly certain the economy is recovering. After the 2001 recession, for instance, unemployment didn't peak until June 2003 - 19 months later. After the latest recession, job losses peaked six months later, in December 2009.