The stock market is up. Interest rates are down. Sales of existing homes have jumped. The economy grew in the year’s third quarter. All this has led some people—including Federal Reserve Chairman Ben Bernanke—to say that the two-year recession has “very likely ended,” although an official declaration probably won’t come for months.
Has the economic bungee cord finally snapped back?
“I wish there was a simple way to boil it down,” says Brian Bethune, chief U.S. financial economist with IHS Global Insight, a business consulting company based in Boston. “But there are a variety of indicators like production, profits, employment and income.”
“It’s sort of like making a soup,” he says. “You throw the ingredients in the pot, blend them and then look at the result. Green soup, the recession is over. Yellow, we’re in a twilight zone. Red, we’re still in trouble.”
While some experts may see a “green soup,” many Americans see the pot bubbling red. Consumer confidence, which had risen last spring, has been stagnant or falling since May. Part of the anxiety is due to persistent unemployment. The rate dropped a scant 0.2 percentage points to 10 percent in November, prompting a hastily convened White House Forum on Jobs and Economic Growth. “Digging ourselves out of the hole ... is not going to be easy,” said President Barack Obama.
Some 15.7 million Americans out of work agree: It doesn’t matter what the economic indicators say. To them, the recession is over when they get a job.
But for others, there are personal benchmarks, ranging from the simple to the serious, about when they think the recession will be over. Here are a few:
“When folks smile again—there’s lots of grim desperation out there along with lots of empty buildings.” —Dave Murrow, public relations consultant, Phoenix.
“When people start building their ugly McMansions again and living beyond their means—that would be terrible.” —Ayako Doi, journalist, Falls Church, Va.
“When my handyman stops finding things to fix in my house. I think maybe he’s breaking stuff just to keep busy.” —Paul Ben-Victor, actor (The Wire, In Plain Sight).
“When I have the confidence that I can get financing and make the payments on a new truck.” —Thomas J. Guldi, electrician, Bridgehampton, N.Y.
“When there’s an increase in sales of men’s underwear, which is an interesting indicator. Since those sales are usually flat, a dip is a bad sign for the economy.” —Bill Patterson, market analyst, Chicago.
“When I stop bringing my own drink and candy to the movies.”—Barry Moltz, author, motivational speaker, Chicago.
“When my son, who recently graduated from college, gets a job and moves out of our home.” —Diane Nygaard, lawyer, Overland Park, Kan.
“When the mailbox contains an unsolicited credit card offer again.”—John L. Herman Jr., author and entrepreneur, Lutherville, Md.
“When we don’t receive 75 job applications for one open position.”—Alicia Munnell, executive director, Center for Retirement Research at Boston College.
“When people stop trying to fit their lives into a carryon to avoid the $20 checked baggage fee.” —Laura Begley, deputy editor, Travel + Leisure magazine.
“When I can afford the fuel to mow my lawn and tell the goat he is fired.” —Jeremy Britton, Queensland, Australia, author of Who’s Taking Your Money?
“When the car ads on television replace those for depression meds.”—Tom Pryor, director, Small Business Development Center for Enterprise Excellence, Fort Worth, Texas.
“When the number of long-term unemployed [5.9 million in November] starts to drop, then I’ll know that the economy is beginning to make a difference for people who have been most affected.”—John Challenger, Challenger, Gray & Christmas, Chicago.
“When I become first in line at the stroke of noon at our local thrift shop and the pickin’s are more like they were two years ago. Ohhhh, we used to get some gooood stuff.” —Joy Cadden, handbag designer, Millville, Del.
“When our clients go back to hiring us to write their resumés for a promotion or career advancement, not just to get in the door for any type of job.” —Lauren Milligan, career consultant, Downers Grove, Ill.
“When fear and despair in people’s eyes melts to smiles and laughter, and humor shifts from wry and angry to lighthearted.”—Linne Bourget, author and speaker, Phoenix.
“When I wake up in the middle of the night to feed my newborn, not just to worry about my 401(k).” —Marc Freedman, Civic Ventures, San Francisco.
“When I don’t have to worry every week about making payroll in my husband’s dental office—something I never had to worry about before.” —Lori Reader, office manager, Melbourne, Fla.
“When I can rehire the employees I had to lay off.” —Steven L. Carter, contractor, Santa Monica, Calif.
“When I can put my house on the market for more than it is worth.” —Melora Hardin, actress
“When my commission is more than I pay my baby-sitter.” —Kelly Brockington, high-end retail, New York
“When I get a job.” –Norm Elrod, Jackson Heights, N.Y.
“When the line at the church for assistance at the food bank is shorter.” —Robert Bogan, volunteer church administrator, Fort Washington, Md.
“When I spend more time finding boxes to ship my art than places in my studio to store it.” —Pablo Solomon, artist, Lampasas, Texas
“When my patients go back to talking about how much they hate their mother, rather than how much they hate the government for getting them into this financial mess.” —Carole Lieberman, psychiatrist, Beverly Hills, Calif.
“When I stop putting up with two malfunctioning keys on my piano and finally call in the tuner.” – Clyde Haberman, columnist, New York Times
“When I no longer count mail-in rebates as income.” —Nancy Lombardo, comedian, New York
“When friends stop calling for a ‘small favor’… a small loan.”— Marc Levin, filmmaker (Schmatta: Rags to Riches to Rags)
“When the people wandering the shopping mall don’t look like they’re there for a cheap thrill because they don’t really have money to buy.” —Sohini Baliga, communications consultant, Vienna, Va.
Despite the general angst, some people see glimmers of hope.
“There are signs that the economic thaw is well under way, at least for most people,” says Stephen Dubner, coauthor of SuperFreakonomics. “I see it in the way parents at my kids’ school are once again talking about their kids instead of their financial worries,” he says. “I see it in the way people smile as they eat in restaurants and talk about things they love and hate, and whether the Yankees deserved to win the World Series again.”
Gus Faucher, director of macroeconomics for Moody’s Economy.com, is also optimistic. “Industrial production is up, retail sales have stabilized,” he says. “But people aren’t going to realize that until the job market turns around, and typically the labor market doesn’t turn around until six to nine months after the recession ends.”
Americans may have to continue to slog their way out of this recession. Not even those masters of comedy and magic, Penn and Teller, can make it go away.
“Every night after our show in Vegas our fans ask, ‘Can you do some magic and make this recession disappear?’ ” says Penn Jillette. “Unfortunately, we have to tell them we can only use our powers for evil.”
Economic indicators may be saying that the recession is over, says former New York City Mayor Ed Koch. But, he adds, “it’s not over for anyone unemployed and looking for a job.”
Cathie Gandel writes about business and the economy. She lives in the New York area.