Tuesday, September 15, 2009
Bernanke: Recession Has Likely Ended
U.S. Federal Reserve Chairman Ben Bernanke made his most emphatic declaration yet that the recession has ended, as a separate data release Tuesday showed a rebound in retail sales. But Mr. Bernanke reiterated that tight credit conditions and a soft labor market will prove to be a challenge.
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2 comments:
This forecast from Bernanke must be taken with a grain of salt. Yes, the retail sales have jumped up, but is that so reliable? Just as in the past, an index such as this can just represent an artificial demand due to borrowed money. Additionally, I think with continued unemployment the future may not look so bright. Unemployed people are unable to pay off their homes and a foreclosure cycle can reoccur. However, the Christmas season is soon and we can all rely on that for even better retail sales.
I think it is somewhat of a reassurance to hear that the worst may be over. It is not a guarantee that things will get immediately better, but at least we can expect things to improve, however slowly. The biggest problem with declaring something like "the recession is over," however, is that many people will probably expect instant results. This will not occur, as Bernanke noted that new jobs will not likely be produced quickly.
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