The Recession Ended… in September

Says who: U.S. Commerce Secretary Gary Locke, as the department reported a 3.5 percent growth in the GDP in the third quarter following six quarters of decline.

“Today’s numbers indicate that the tough decisions this administration made to rescue the economy from the abyss were correct. We’re headed in the right direction, and even though there are still too many Americans out of work and still much work to be done, without the action taken in the early days of this administration, the pain families are feeling today would be much worse.” (Commerce Department press release)…

The Recovery Has Arrived… on Wall Street

How so: With the Dow Jones Industrial Average nearing the 10,000 mark, it would seem good times are coming back. The last time it was around 10,000 was last fall, and it was just one short year earlier when it hit its high around 14,000. Remember that? Back when we were all swimming in cash, vacationing in St. Bart’s, shopping just because we felt like it… (You were doing that, right?)

Good signs: The macros are up, from the DJIA (in March we were talking Dow 5,000!) to strong earnings from Google and Apple to a strong showing from the almighty GDP, and even housing data is on the move (well, sales at least, although foreclosures continue their nightmarish rise). Is this change we can believe in?…

The Recession Will End… When Google Says So?

Says who: Eric Schmidt, Google’s chief executive

“While there is obviously a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us… So we’re very optimistic now about the future. We now have the business confidence to invest heavily in the next phase of innovation, hoping to invent the future as we see it.” (via SeekingAlpha)

Why he might be wrong: For the 15.1+ million Americans facing the most challenging job market in decades…

The Recession Will End… When We All Say So

Last week, a lot of you let us know when and how the recession will be over for you in our giveaway. Not surprisingly, common themes revolved around jobs, college tuition, and real estate. These days these topics make up the recession buzz and sound almost like another headline or statistic on the recession’s status. Yet, your input brought the recession’s tensions, struggles, frustrations, and hopes to a very human level—reminders that whether we like it or not, we’re in this together.

As mom Carol Connolly said, “I will know that the recession is over when I can stop wondering and worrying if my husband or I or one of my children will lose our jobs.”…

Contest: The Recession Will End… When YOU Say So

For this week’s feature, it’s your call when the recession will end. For about four months, we’ve given you our take on the recession’s end with a focus ranging from economist forecasts, impact to on your lives like health insurance and college tuition, and recession trends like staycations and the coupon craze.

After taking you through our thoughts on the recession’s end from many angles, we’re interested to know how you measure the recession’s end in your own life. At a macro level, we’ve been inundated with headlines of housing, unemployment, and other economic analysis and forecasts. In our everyday lives, we’ve felt recession pressures in unique ways and broken down our material needs into necessities, small splurges and sizable sacrifices…

The Recession Will End… When Coupons Are So Yesterday

Like the Great Depression in the 1930s, the Great Recession seems destined to turn many Americans into lasting coupon-cutters, scrimpers and savers. (via AP)

Why it might be false: Coupon clipping is in vogue during the down economy, but recent history shows that this trend comes and goes with the economic cycles. According to Inmar, a coupon-processing company, coupon redemption reached its height at the end of the early 1990’s recession. Coupon use fell fairly steadily until the end of 2008 but then picked up again when swaths of demographic groups like young, single and affluent consumers started to use coupons. While it’s true that these groups would never be expected to clip coupons, let’s be real and admit that it’s hard to go against the grain when signs of the downturn are ubiquitous. In fact, their coupon use may even be attributed to peer pressure since conspicuous spending is so out. It’s almost impossible not to want to be disciplined and spend money a little more wisely during the Great Recession, but this restrained way of living probably won’t last when it’s over…

The Recession Will End … When Cheap Treats are History and Spending is Back to Normal

[Consumer spending] makes up about 70% of the economy, and the American shopper traditionally has led the nation out of recession. Not this time, most experts say. Consumers have lost about $13 trillion in wealth in the housing and stock market swoons. They’re trying to recoup some of that by socking away any extra cash. The savings rate hit 5.2% in the second quarter vs. a low of 1% before the crisis. And don’t forget tight-fisted lenders, the fall-off in home equity loans amid plunging real estate values, and a high jobless rate that makes even working Americans nervous about their future.

“People are beginning to realize you can’t live beyond your means forever,” says Standard & Poor’s chief economist David Wyss.” (via USA Today)

Why it might be false and consumer spending won’t get us out of the recession: After the Great Depression, many Americans stayed cheap and thrifty long after the economy started to grow—long enough for their children and grandchildren to remember. The Great Recession has been the first major economic disruption in many Americans’ lifetimes, so of course there are questions about whether the effects will be similarly lasting. There is no robust recovery clearly in sight…

The Recession Will End … When Trust is Restored in the Financial Industry

Says who: JPMorgan Chase CEO Jamie Dimon

“No discussion of the future of the financial system can be complete without an acknowledgment of the industry’s responsibility to re-earn the trust of the American people. How do we earn trust back? First, company leadership must foster a culture within their institutions that focuses on integrity, strong execution, quality products, long-term value creation, and doing the right thing. Rewards have to track real, sustained, risk-adjusted performance. Golden parachutes, special contracts, and unreasonable perks must disappear. There must be a relentless focus on risk management that starts at the top of the organization and permeates down to the entire firm. This should be business-as-usual, but at too many places, it wasn’t.” (via WSJ)

Why it might be false: Restoring trust in an industry that brought down the global economy will probably be so tough that we’ll see growth in other key sectors of the economy before there’s actual, real trust here…

The Recession Will End… When I Can Afford College

Says who: College Board, the not-for-profit responsible for the SAT, the PSAT/NMSQT, and the Advanced Placement Program

“Our studentPOLL study, a random national sample of high school seniors who registered and/or took the SAT, found that the recession is having a considerable impact on two-thirds of these students and their families. Nearly one-third indicated that their parents’ income had declined, 23 percent reported that their family had fallen on hard times, and one in six revealed that the current economic circumstances have forced them to change their college plans.” (via College Board)

Why it might be false: In a recent Gallup poll commissioned by student loan provider Sallie Mae, more than half of U.S. parents indicated that they plan to pay for all or part of their children’s college expenses with their current income and are confident they can continue to support them despite the recession…

The Recession Will End… When GM Starts Hiring Again

Says who: The 250,000 Americans impacted by fallout in the automotive industry (i.e. lost their jobs), whether they worked on site for the companies, at dealerships, or supplier companies.

Why it might be false: manufacturing is just 10 percent of the economy; not the 38.8 percent it once was, so what happens in manufacturing won’t move the needle nearly as much as it once might have. Adding jobs by any employer will surely offer a positive sign that the recession is ending, but it’s almost impossible for General Motors to offer enough jobs to crack that.

Why it might be true: If – and this is a big if – General Motors could hire back, and prompt its dealerships and suppliers to hire back – all the people it caused to lose their jobs, that would certainly do something for the economy: In a single swoop, it would lower the national unemployment rate from 9.4%. It would also be a sign that output is up, a key indicator of economic health…