The data say the recession ended March 31.
The U.S. Bureau of Economic Analysis announced this morning that U.S. gross domestic product has increased for a third straight quarter. After growing 2.2% in the third quarter of 2009 and 5.6% in the fourth quarter, the U.S. economy grew 3.2% in the first quarter of 2010 as consumer spending rose at the fastest pace in three years, the bureau said.
Three consecutive quarters of growth. By the numbers, the recession that started in December 2007, the United States' longest economic downturn since the Great Depression, is finally over. (Even with the GDP numbers, though, the official end won’t come until the private National Bureau of Economic Research says so, and so far it has chosen to wait.)
Feel like dancing in the streets? Didn't think so. For a lot of Americans, no matter what the numbers say, the pain of the recession will go on. The recession is over? So what.
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What we've got is a clear disconnect between what the economists' numbers say and what most Americans feel in their own lives.
The economy got smaller and smaller in the first half of 2009 and finally hit bottom in the second quarter, at $12.90 trillion. That was a drop of 3.7% from the peak in the economy in the fourth quarter of 2007, and it represented about $490 billion -- almost half a trillion -- in lost economic activity.
The recovery, by the numbers anyway, started in the third quarter, when the economy grew by $71 billion. By the fourth quarter, GDP was back to where it had been in the fourth quarter of 2008. And with first-quarter GDP growth of 3.2%, the economy has recovered all the ground it had lost since the fourth quarter of 2007.
Why, that means the Great Recession has been completely erased. Never happened. Business as usual. Back to normal.
Back to normal? Let's hope not.
The not-so-great recovery
The effects of the recession are a long way from over.When GDP began to rise again in June 2009, the U.S. economy kept losing jobs. Since then, 900,000 workers have lost their jobs. Almost three quarters into the recovery, in March, the official unemployment rate was still 9.7%, even though the economy had added 162,000 jobs that month. The unofficial full unemployment rate, the one that includes discouraged workers who have stopped looking for jobs and those who have found part-time work but really want to work full time, actually went up in March, to 16.9%, from 16.8% in February.
And then there are the long-term unemployed. The number of workers out of work for 27 weeks or longer climbed in March to 6.5 million from 6.1 million in February. That means that 44.1% of all the unemployed have been out of work for half a year or more.That's the highest percentage since the government began keeping records in 1948.
The extraordinarily high percentage of long-term unemployed isn't just a feature of this recession. The numbers say long-term unemployment has been rising over the past 10 years and that the recent recession only continues a trend visible in the recession of 2001 as well. One-quarter of the long-term unemployed leave the work force permanently, a Congressional Budget Office study found.
Not that even those of us who are employed are exactly rolling in the green stuff now that the recession is over. Personal income rose just 0.1% in February. Real disposable personal income grew by the same 0.1% in February.
And it's not like our gains in our personal wealth are making up for that lag in income. Sure, stocks are up 80% off the March 2009 bottom, but investors are still looking at a Dow Jones Industrial Average ($INDU) that was at 10,500 a decade ago and stands around 11,000 today. That's a gain of about 5% in 10 years.
Continued: Home prices a big pain point
