Check out this optimistic article. The recession is over!
There are some points to believe in that: "recovery in manufacturing is well established, and service-industry expansion has picked up pace in each of the past three months. Labour markets are finally improving; during the first quarter of this year employment grew by 162,000 or 1.4m, depending on which data set you use. And investors have bought the idea of recovery. The Dow Jones Industrial Average has risen by over 10% since early February, and recently closed above 11,000 for the first time since September 2008."
On the contrary, since June 2009 as the likely recession end-date, we saw a huge deterioration in employment. Did the increase in real GDP recently a sign of recession ending? I think it is not. The graph of employment after recession do not show the consistency to come up with such conclusion.
Because of the definition of recession, the increase in GDP technically means the recession is over. But unfortunately with unemployment still so high, it still feels like a recession even now. Unemployment is also a lagging indicator though, so it will definitely still be high even after the recession ends.
ReplyDeleteIt would be very interesting to see the unemployment rates for the recessions illustrated in the article and graph. It seems strange to me that the recovery of the 1982 recession was much quicker than the most recent. What were the factors that contributed to the swift recoveries of the other recessions.
ReplyDeleteAs the article said, altough according to the GDP growth rate we can say that the recession is over, the condition of unemployment is still unpromising. Some states have reported to have job growth, the national unemployment rate is still quite high. Maybe what we need to focus on now is creating job opportunities.
ReplyDeleteEven if the recession were to over and I'm not saying that it is, the economy is still facing big challenges. The high unemployment rate and the recent adjustments in policy regarding unemployment insurance are quite scary. The unemployment rate will eventually head towards its natural rate but it could take a long time. Also while trying to decrease unemployment and achieve growth it is important to look out for other threats such as hyperinflation.
ReplyDeleteThe factor that contributes to swift recovery of other recession in my opinion is increasing in demand. This was reflected by increasing production, more employment. As we see in the graph, the change in unemployment rate is not immediate but first gradual and then significantly climbing. The graph also showed that after summer 2009, UR did not increased, instead in fell, fell significantly.
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