Recession’s end doesn’t mean full recovery
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Bob Moon: OK, so do you remember what was going on in your life back in June of last year? Don’t know about you, but I wasn’t exactly jumping up and down here, over how well the economy was doin’. But early last summer — 15 months ago — is when the economy officially emerged from the Great Recession. The timing was announced today by a panel of leading economists, who we might point out, have a job deciding such things at the National Bureau of Economic Research. So the recession lasted 18 months, which makes it the longest and, it turns out, deepest since the Great Depression. There’s nothing like a little dose of reality, though, to curb your enthusiasm.
Here’s Marketplace’s Mitchell Hartman.
Mitchell Hartman: The National Bureau of Economic Research uses the broadest measures of economic activity — like gross domestic product, hiring and layoffs and personal income — to decide when the economy’s done shrinking, the recession’s over and we’re growing again.
But MIT economist Jim Poterba, who chairs the group, says calling the end of a recession and feeling it are not the same.
Jim Poterba: When you begin a recovery — when you turn the corner — for quite a while you’re quite close to where you were at the bottom. And consequently, the economy may not feel very strong, and that’s because it isn’t.
To see how much this recovery really feels like one 15 months on, I headed to Downtown Portland and caught up with Laurel Baffa. She’s an HR recruiter.
Laurel Baffa: We would not consider trying to sell our house during this market over the last couple of years, that sort of thing, and we’re just beginning to have a sense that there’s hope and there’s a future here.
Home prices are still falling, foreclosures are still mounting.
Hartman: What about spending?
Baffa: I would say yes, we’re loosening a little, just a smidge, at the moment. Nothing dramatic.
And that’s a good description of the retail industry: Improving a bit, but nothing dramatic.
IT consultant Jesse Smith says for him, it still looks like a recession on payday.
Jesse Smith: The company I’m doing work for right now have had a raise freeze for a number of years, a hiring freeze for years. It seems like at least the jobs part is taking a while to come back.
Lawrence Mishel heads up the Economic Policy Institute.
Lawrence Mishel: We have to be creating jobs and rapidly lowering unemployment, and people need to see the paychecks of their family members rising.
Instead, unemployment’s still near 10 percent, and it’ll probably be well into next year until private employers start hiring enough people to make a dent.
I’m Mitchell Hartman for Marketplace.
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