Economic Pain Lingers Despite Recession's End The National Bureau of Economic Research said Monday that the recession, which began in December 2007, ended more than a year ago. But leading economists -- and the president -- said it doesn't mean the economy is now back on track.
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Economic Pain Lingers Despite Recession's End

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Economic Pain Lingers Despite Recession's End

Economic Pain Lingers Despite Recession's End

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm David Greene.

With 15 million Americans out of work, the number of home foreclosures mounting and businesses still struggling, it may not seem like the great recession is over. But officially, it is. In fact, we found out today that the recession actually ended more than a year ago - way back in June of 2009.

NPR's John Ydstie reports.

JOHN YDSTIE: The people who decide when a recession begins, and when it ends, are members of the Business Cycle Dating Committee at the National Bureau of Economic Research. Harvard professor Jeffrey Frankel, who's on the panel, says they aren't saying the economy has recovered. They've just pinpointed the month when it stopped getting worse.

Professor JEFFREY FRANKEL (Kennedy School of Government, Harvard University): So when we say it's recession ended, we're not saying that things are now good. We're only saying that things are getting better.

YDSTIE: During a town hall meeting in Washington today, President Obama said that for people suffering from the recession, the official pronouncement brings little comfort.

President BARACK OBAMA: Even though economists may say that the recession officially ended last year, obviously, for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, it's still very real for them.

YDSTIE: That's not surprising since even though it officially ended more than a year ago, it was the worst recession since the Great Depression. Still, it was nowhere near as severe as the Great Depression, when the country's economic output declined by 27 percent.

During the recent recession, which began in December of 2007, the economy lost 4.4 percent over a period of 18 months. That does make it longer than the deep recessions of the mid-1970s and early 1980s.

And job losses were disproportionately high this time around, causing much of this recession's misery. The unemployment rate soared to just over 10 percent and remains stubbornly high, at 9.6 percent.

With that in mind, Frankel says, it might come as a surprise that job growth actually started quite quickly after this recession.

Prof. FRANKEL: The turnaround in the labor market is not particularly late this time, compared to the preceding two recessions. In fact, the turnaround in the labor market came earlier than the preceding two.

YDSTIE: Those were the recessions of 1991 and 2000. The problem this time is that the unemployment hole is much deeper. As is often the case, it took the Business Cycle Dating Committee more than a year to fix the end date of the recession. That's partly because it was waiting for revisions in data. But Frankel says it's also because they had to clear up one question that was important to the committee, if not everybody else.

Prof. FRANKEL: We had to wait until we could answer the question: If there were a renewed downturn that were to hit tomorrow, would that count as a separate, second recession - or part of the same recession? And until we were confident that we would be able to answer that that was a second recession, we had to wait.

YDSTIE: So if the economy starts losing ground again, it will not be a double dip but a whole new recession. Personally, Frankel says he thinks the economy will continue to slowly improve. That's not likely to get President Obama off the hook.

At the town hall meeting today, audience members expressed disappointment that there hasn't been more progress. The president insisted his policies are having a positive effect.

Pres. OBAMA: My goal here is not to try to convince you that everything is where it needs to be. It's not. That's why I ran for president. But what I am saying is, is that we're moving in the right direction.

YDSTIE: Taking a shot at the Republican policies of the past decade, the president said something that took 10 years to create is going to take a little more time to solve.

John Ydstie, NPR News, Washington.

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