Am I the only one who finds that definition of recovery callous?
Back to business as usual, everyone with money is safe, only workers are still in trouble, so the recession is over.
My understanding is that unemployment is a “lagging” indicator, meaning that it usually decreases after a recession ends. So this is not unusual.
Bernanke’s probably right, but a drop in unemployment is simply not one of the criteria for emerging from a recession.
Regardless of how the popular media throws the word around, in economics a Recession is a very specific defined thing, not a general state of monetary crappiness.
Whether or not an economy is in recession isn’t linked to unemployment levels, it’s linked to economic growth or contraction.
Generally, as the economy comes out of recession it expands, and that expansion will generally eventually result in job creation, but there’s a lag time while existing inventory and staffing can still handle the slowly rising demand.
I think we need a new definition of recession. The current one is deceptive. What if another “major indicator” left out a big component. Like “Cost of Living stabilized this month. In other news, cost of food doubled.” See, COL would be a useless indicator without counting food. And “recession is behind us” is bogus without jobs. The loss of jobs was part of every news story on the way down, should be on the way up.
But if the price of gas dropped to one penny a gallon, prices for housing dropped by 80%, and so on, the cost of food could double and the cost of living could go down.
If you have several data points that define a trend, not all data points have to lie precisely on that trend.
Hint: the “Cost of Living” (the CPI in the US), DOES exclude the cost of food. And of gasoline and home heating oil / gas.
These have been left out of the official inflation figures since the 70s. The official rrationale is the prices of these items jumps around so much they’d make the infaltion figures too noisy. If there is a general permanent increase in the cost of fuel or food, that will eventually lead to an increase in the price of everything esle. And that increase *will *show up in the oficial figures.