Ben Bernanke declared today that “From a technical perspective, the recession is very likely over at this point.” What has made him make this declaration.
If he using the stockmarket as an indication, the recession may be over. Stocks are still down 30% from the beginning of the year in 2008. However, the S&P 500 is up about 50% since the beginning of the year. Thus, according to the stock market, the recession may be over. However, unemployment is at 9.6%. Further, economists predict that unemployment will reach 10% by the end of the year.
Economic growth may be on the rise, but changes in employment levels historically have lagged behind changes in overall economic production. Economic activity may be growing, but unemployment will likely remain high for the near-term future.
Then again–as recent history has shown us–economists are not good at predicting the future. Instead, you should just take from this post that nobody knows what will happen next.
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