Ding dong! The recession's dead.
Wake up, sleepy head, rub your eyes, get out of bed. Wake up, the recession's dead. It's gone where the goblins go. Below — below — below.
Apologies to the Wizard of Oz. But that's what I hear in my head now that a few economists, akin to the Munchkins of Oz, declare the official end to this wretched downturn.
Now let's be clear: The technical end of this recession does not mean a switch suddenly is flipped and we're back in the economic fast lane. But it does signify that the generalized decline is over. The tipping point has arrived at last.
Sure, we will still see bits and pieces of bad news for a while — from foreclosures and higher unemployment rates to bankruptcies and fiscal crises, especially in Florida and Tampa Bay. But given the tougher hit sustained here, the overall trend will start to turn positive. Slowly positive.
"In our opinion, the U.S. recession is over," says Richard Hoey, chief economist of Bank of New York Mellon Corp. Four reasons why:
1. The federal stimulus package will continue to push the economy upward.
2. Inventories of goods held by businesses are depleted and need reordering.
3. The cheaper cost of capital will let businesses reduce their cost pressures more by refinancing than by layoffs.
4. An easing credit crunch will help sustain the upturn.
That's the theory. Some of us will find that end-of-recession report, like Mark Twain's obituary, clearly premature.
End of recession? Tampa Bay's unemployment rate rose in June to 11.1 percent, and Hernando County hit 13 percent. Banks in Sarasota and Venice just became the fifth and sixth to fail in Florida this year. Ocala's big mortgage business, Taylor, Bean & Whitaker, shut down last week, with 1,000 people losing their jobs on the spot.
But take heart. Unemployment rates and bank failures reflect past trends. There are more optimistic signs that the recession, at least in name, may be toast. Consider:
• Local housing's no longer falling off a cliff. In Pinellas County in July, residential unit sales rose 26 percent from a year ago, while the number of residential listings dropped 22 percent. While July's median price of residential properties in the county was $136,000, down from $147,000 in June and $172,500 a year ago, the pace of decline is slowing significantly.
• Nationally, the unemployment rate fell to 9.4 percent (rather than rose to 9.7 percent), the first drop since April 2008. That bodes well for Florida, which relies heavily on solvent folks elsewhere moving here.
• After landing in bankruptcy in June and exiting in July, the new General Motors already finds livelier sales. Tampa Bay area Chevy dealers closed July's books with their best monthly sales figures of the year, and their highest numbers since September. Overall, Tampa Bay area Chevy dealers' numbers were up 13 percent compared to last year, well above the national 2 percent increase, says Jim Gurley, GM's zone manager.
"We think we've made the turn and through the rest of 2009 think things will get better and better," he said Monday. "By 2010, things will be rebounding back."
Now that's confidence. Right here. Not somewhere over the rainbow.
Robert Trigaux can be reached at firstname.lastname@example.org.