The Federal Reserve Chairman Ben Bernanke said on Tuesday that the “recession is very likely over.” Data released on Tuesday suggest that in the month of August people flocked to stores and spent money. With other incentives such as “Cash for Clunkers” people are dumping their money into the automobile industry as it sales have risen 2.7 percent. Bernanke also said, “"Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time, as many people will still find that their job security and their employment status is not what they wish it was.” Although the recession may be over, the job growth rate in 2010 will still likely struggle. As for the rest of the year many businesses will try to replenish depleted inventories and increase government spending.
4 comments:
It was intersting to read this article and hear Bernanke say that the "recession is very likely over" in the United States, when probably most Americans will disagree with this statement. Although August showed promise with consumers flocking to stores and spending money, as well as the idea of Cash for Clunkers, I agree more with Bernanke's second idea. It is still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was.
It is good to see positive news about the economy and the suspected end to the recession, but we need not overlook Bernanke's cautioning of a weak economy and slow unemployment declines. The road to recovery has bottomed out but it will still be a slow ride up for a number of years.
I agree with Bernanke's statement that “recession is very likely over” although many people think that it is too soon to say so. Obviously, it is hard to see any physical improvement in the economy, but the numbers do indicate that recession is over and the slow GDP growth should occur very soon. There will be no immediate effect of course, but improving stock market and slowing increase of unemployment rate are definitely good signs.
Bernanke's statement does provide good insight on where the economy is at at this point in the year. Although it may be too soon to really tell if we have made it out of the recession, it is good to see that retail spending is increasing. Hopefully this trend increases into the new year and unemployment starts to decrease.
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