Now, the fed chairman is using similar logic to mark the end of the recession.
Federal Reserve Chairman Ben Bernanke said Tuesday that the worst recession since the 1930s is probably over..
Bernanke said the economy likely is growing now, but it won't be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising
Technically, a recession ends when GDP stops dropping and begins growing. Of course, that happened at the end of 1933 and no one says the great depression ended in 1933.
So, the technical end of the recession and the end of the recession as the public will see it are going to be two totally different things. So, while it's fine for Chairman Bernanke to say that he believes the recession is over, it's not something I would advise the president to say. It's very likely that we will see growth in this quarter and that woud be a technical end to the recession.
The technical end of the recession is not the most important thing regardless. What's most important is the pace of the recovery once the recession ends. The recession of 1982-1983 was deep and long. Yet, once the economy recovered, the recovery was booming. That's the sort of recovery I am sure the president is hoping for. That will be the ultimate test of his policies.
Unemployment is currently near 10%. We expect that to grow even higher. Much more important than the technical end of the recession will be just how quickly we see jobs growth and more than that, how much jobs will grow once that happens.