When Gallup asked people about the state of the economy this spring, as a recovery appeared to have taken hold, the polling company found “nearly half of Americans, 46%, still say the economy is in either a recession or a depression.” Only 40% said they thought a recovery was underway. By the strictest measurements of economic data, economists said the Great Recession had ended. For a very large number of Main Street Americans, that opinion means nothing.
The public dialog about the economy has gone from “how strong will the recovery be?” to “why are we slipping back into a recession?” In a period as short as the past three months, economists have revised rosy forecasts that called for sharp increases in gross domestic product in the last quarter of 2012 and the entire year 2013 to worse predictions — some of which now project there will be no economic growth in the United States at all over the next year. Some experts even believe that the so-called fiscal cliff at the end of the year could cause an economic catastrophe.
The tenor of the debate has turned negative for a fairly small number of reasons, but each has an overwhelming effect on the national economy. Most of Europe has fallen into recession. The European Union is the largest region by GDP. Consequently, American exporters rely on the region for revenue. The American employment market, which seemed so promising at the turn of the year when job improvement was 200,000 a month, turned to a market in which nearly no jobs are added at all. The hope of a housing recovery has dissolved as foreclosures rise. Consumer sentiment has reached lows not recorded in over a year.
The economy is similar to the way it was 18 months ago. Americans have returned to searching for signs of a recovery. The reasons for optimism are the same now as they were in late 2010. They rely on the ability of the economy to create jobs, which builds consumer confidence and leads to consumer spending. And consumer spending is still over two-thirds of U.S. GDP.
24/7 Wall St. examined the major factors that have traditionally driven American economic growth. Home sales cannot recover without jobs. Taxes can dictate what consumers are willing to spend. American companies that do well overseas are more likely to add new workers.
These are the 10 signs the recession is over.