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Recession officially ended 15 months ago, but millions still hurting

WASHINGTON — It turns out the recession ended more than a year ago.

Feeling better now?

The National Bureau of Economic Research, a panel of academic economists based in Cambridge, Mass., said the recession lasted 18 months. It started in December 2007 and ended in June 2009. Previously, the longest post-World War II downturns were those in 1973-1975 and in 1981-1982. Both of those lasted 16 months.

The latest recession may be over, but you won't be hearing any cheers from the millions of Americans who are struggling to find a job. Or are worried about the ones they have. Or have lost their homes. Or are behind on the mortgage.

"Every single one of the individuals who wrote the report needs a serious reality check," said Bob Johnson of the Queens borough of New York, 46, who had worked in communications and has been looking for a job for more than three years.

Not that it's the fault of the academics. It's their job to declare when recessions officially begin and end.

Their finding is one that economic historians spend a lot of time pondering. Politicians care, too. They don't want to be blamed for downturns that happen on their watch.

One of those politicians is President Barack Obama, who inherited the recession — it began in December 2007, according to the bureau. Obama found little reason Monday to celebrate that it had officially ended.

"The hole was so deep that a lot of people out there are still hurting," the president, whose Democratic Party faces a likely setback in the midterm elections, said at a town hall meeting sponsored by CNBC.

In President George W. Bush's eight years in office, the United States fell into two recessions. The first started in March 2001 and ended that November.

Since the most recent recession began, 7.3 million jobs have disappeared. Nearly 2.5 million homes have been repossessed. Unemployment is at 9.6 percent.

Since the technical end of the recession, the economy has been growing, but the growth has been painfully slow.

How slow? The Organization for Economic Cooperation and Development figures the U.S. economy will grow 2.6 percent this year. It would take growth twice that fast to drive down unemployment by a single percentage point.

Unemployment usually keeps rising well after a recession ends. That's because it takes time for companies to gain confidence in the economy, know that customer demand will last, and add jobs.

To make its call on the end of a recession, the bureau looks at the statistics behind the gross domestic product, which measures the total value of the economy. It also reviews incomes, employment and industrial activity.

The bureau pointed out that a downturn in the economy any time soon would now mark the start of a new recession. The last time that happened was in 1981 and 1982, most economists believe.

The last recession that lasted longer than this one was, well, something far worse than a recession: the Great Depression. It included a downturn of 31/2 years, ending in 1933, and another lasting more than a year, ending in 1938.

By the Numbers

How much better?

The group of economists that dates the beginning and end of recessions has announced that the nation's longest since the Great Depression ended in June 2009. That means the economy has expanded for 15 months. But for many Americans, particularly the 15 million still unemployed, the past year and three months have hardly felt like a recovery. Consider how the economy has performed during that time:

329,000: The net number of jobs lost since the recession officially ended.

0.1 percentage point: The rise in unemployment, to 9.6 percent last month from 9.5 percent in June 2009.

3 percent: The growth in annualized gross domestic product, the broadest gauge of the economy's output.

0.5 percent: The increase in personal income.

2 percent: The increase in personal spending.

22 percent: The stock market's rise, as measured by the Standard & Poor's 500 index.

Recession officially ended 15 months ago, but millions still hurting 09/20/10 [Last modified: Monday, September 20, 2010 9:26pm]
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