The news from Washington this morning is that the recession is over based on economic figures set to be released by the government. However, this has no correlation with jobs since in most parts of the country unemployment levels are at an all time high and continue to increase.
The government is set to release third-quarter Gross Domestic Product (GDP) statistics which experts say will reveal that the GDP is rising at an annual rate of about 3%. These figures validate a commonly held conviction among financial executives that the recession did end last summer. However, these numbers make no sense because there are close to 15 million people still looking for jobs and countless small business and individuals have been unable to get loans. Each day the real estate market reveals home for sale at dirt cheap prices.
The government has continued to maintain its vocal rhetoric’s about the improving economy but in reality it has raised more questions as the situation is in fact worse. While the government keeps on saying the recession is over, it really depends on whom you speak to. As Ronald Regan once remarked, “A recession is when your neighbor loses his or her job. Depression is when you lose yours.”
Despite the grim news on unemployment, economic forecasters predict that the GDP growth is going to remain on the positive side throughout 2010. Says, Federal Reserve Chairman, Ben Bernanke, “From a technical perspective, the recession is very likely over,” To further emphasize the above point, Christine Romer, the chair on White House Council of Economic Advisers added, “A recession that showed no signs of ending last January appears to be firmly entering the recovery phase.”
However, not all experts agree with the above figures and indicate that despite the positive GDP showings, unemployment is still going to linger around 10 percent and there is a lot more work to be done before one can really claim that the recession is over. Since the recession began in Dec 2007, the US economy has lost close to 7 million jobs; with more than 50 percent of the losses occurring after President Obama was elected in Jan 2009.
While there are some signs of recovery in the economy, the road has been shaky. Stocks have pitched up by about 50 percent since March but continued to dip on a daily basis. Since Washington injected fund into some companies, large banks have shown signs of profit. However, the number of small banks failing is at an all time high. There is significant public discontent among the CEO bonuses and this recently led the government to tighten down on executive compensation on firms that received financial bailout money.
Said the president in his weekly Saturday radio address, “While credit may be more available for large businesses, too many small business owners are still struggling to get the credit they need. These are the very taxpayers who stood by America’s banks in a crisis — and now it’s time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations and create new jobs.”
There have been some improvements in the manufacturing sector but overall there are residual signs of weakness in the commercial market, airline industry, transportation, real estate and retail business. The only good news has been for US exports-the relentless decline in the US dollar has made American goods cheaper and more viable overseas.