Technically, the Great Recession is officially over. The problem is, most of us don't yet believe it, even if that's true.
The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), widely regarded as the official arbiter of economic cycles, recently declared that the Great Recession ended in June 2009.
The committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marked the end of the recession that began in December 2007 and the beginning of an expansion.
The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously, the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.
In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.
Shortly after the NBER's announcement, BizTimes.com asked its readers if they believe that the recession is over. A chilling 81 percent said they did not believe the news. Keep in mind, it's difficult to get 81 percent of the readers to agree the sky is blue.
According to the latest QPS Employment Group survey, 82 percent of the employers surveyed in Wisconsin and Illinois are worried about a double-dip recession in the fourth quarter.
QPS, a Brookfield staffing and recruiting firm, surveyed 350 companies. Sixty-four percent said they were somewhat worried about a double dip, and 18 percent said they were "very much" worried.
Here's the curious thing: Of those same employers, 88 percent said they expect their own business to improve or remain the same in the fourth quarter. In other words, they are not seeing a recession at their companies, but they fear a recession in the economy anyway.
My guess is we won't see the overall optimism numbers rise until the unemployment rate starts to dip sharply. That will take some more heavy lifting.
First-time unemployment claim filings in Wisconsin have been falling by impressive amounts in recent weeks, dipping below the 12,000 mark for the first time in two years. Furthermore, southeastern Wisconsin employers are forecasting gains in hiring for the first time in 28 months, according to the Metropolitan Milwaukee Association of Commerce Business Outlook Survey.
As Michael Mahoney, chief executive officer of Park Bank, told me recently, "Things are moving the right direction."
Bruce Bittles, chief investment strategist for Robert W. Baird & Co. Inc. said the likelihood of a double-dip recession is receding.
- The Federal Reserve Bank of Chicago is forecasting healthy increases in exports from manufacturers in the Midwest, including Wisconsin.
- The Institute for Supply Management (ISM) said its national manufacturing index rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth. The manufacturing sector has expanded for 13 consecutive months.
The recession really is over, even if our collective funk lingers on and the pace of recovery is not what we all would like. Somebody please pass the word.
Steve Jagler is executive editor of BizTimes in Milwaukee and is past president of the Milwaukee Press Club. BizTimes provides news and operational insight for the owners and managers of privately held companies throughout southeastern Wisconsin.
Steve has won several journalism awards as a reporter, a columnist and an editor. He is a graduate of the University of Wisconsin-Milwaukee.
When he is not pursuing the news, Steve enjoys spending time with his wife, Kristi, and their two sons, Justin and James. Steve can be reached at email@example.com.