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October 07, 2010 at 02:10 PM
The recession is over!
To many Americans, this doesn’t make sense, but according to the National Bureau of Economic Research (NBER), the Great Recession ended in June 2009.
Here’s how NBER defines recession, according to a recent press release: “A recession is a period between a peak and a trough. During a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year.”
Economic activity is the key to declaring the onset and end of a recession.
“The committee does not have a fixed definition of economic activity,” said the NBER in a statement. “It examines and compares the behavior of various measures of broad activity: real GDP measured on the product and income sides, economy-wide employment, and real income.
“The committee also may consider indicators that do not cover the entire economy, such as real sales and the Federal Reserve's index of industrial production,” the NBER added.
Has economic activity improved?
Unemployment: In June 2009, 16.5% of Americans were jobless. In August 2010, 16.7% of Americans were jobless.
If the candor of those numbers surprises you, it’s based on the U-6 figures published by the Bureau of Labor Statistics. Even the more commonly known U-3 number increased from 9.5% in June 2009 to 9.6% in August 2010.
Real income: According to a new study released by the Census Bureau, 1 in 7 Americans lives in poverty.
The overall poverty rate climbed to 14.3% or 43.6 million people, the highest since the 1960s. The poverty level for 2009 was set at $21,954 for a family of four.
