Last summer finished the Recession, but began the growth economic downturn
Recession is a technical term that technically doesn't apply to what the United States of America is presently going via. The economy is still in a terrible condition although June 2009 was when the government said Monday that the economic downturn officially finished. The economic downturn began in December 2007 and lasted for 18 months -- the longest slide since World War II. The economy's prolonged freefall had earned it the title of "Great Recession" long before it was officially declared over. The government said the economy won't be returning to its full capacity for a while although it is growing again. The Federal Reserve is doing anything it can to prevent a "growth recession" from occurring where the economy doesn't increase fast enough for unemployment.
Recession vs. Depression
The economy growing again showed that the longest recession since the Good Depression was over. The National Bureau of Economic Research tells us this. The Los Angeles Times lets us know the recession is completely over. This means it would be a new recession if a double dip were to occur. The Good Depression lasted from 1929 to 1933 which makes it the longest recession with 43 months, giving the 18-month Recession the runner up spot. The most recent economic collapse eclipsed 16-month recessions in 1973-75 and 1981-82. The labor market may not recover fast enough as 8 million lost their jobs. The most damage within the recession originated from productivity growth, states the NBER. This was because job growth ceased and let output be sustained.
Recession ended on paper, however not on the street
The expansion that is being seen may not be enough to do anything, says NBER. The Washington Post reports that the NEBR defines an economic downturn as "a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales." According to the panel, GDP and industrial production bottomed out in June 2009. There was no expansion in employment for a long time. It did not pick back up until December 2009. As outlined by the NEBR, just since the end of the recession was announced doesn't mean conditions are getting better.
All about growth recession
While the economy is expanding, it has been too weak to lower the unemployment rate; this is called a growth recession. As outlined by Bloomberg, In the first quarter, there was a 3.7 percent growth while it dropped in 2010's second quarter to a 1.6 percent annual rate for economic expansion. Numerous were excited when they heard the fourth quarter of 2009 showed a 5 percent rate of expansion. A joblessness rate stuck at 9.5 percent and above is stifling the consumer spending the economy needs to grow. Fed chairman Ben Bernake said the agency has the tools to aid the economy. With rates of interest near zero, some think the next step for the Fed is to buy more Treasuries, or government debt. Others believe severe unemployment is the result of Americans lacking the skills to fill accessible jobs -- a problem monetary policy can't fix.
Los Angeles times
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