Rodney just posted a brief item about the “end” of the current deep recession — the Commerce Department officially reported 3.5% growth in the economy during the third quarter of 2009. No doubt Vice President Biden is already preparing to take full credit for this surprising announcement.
But perhaps a little context is in order before we start celebrating. While it is good to see a few “green shoots” signaling that the economy is beginning to rebound, we are still in a recession. Even though we may have stopped digging, collectively we are standing at the bottom of a very deep economic hole. Assuming that the government doesn’t start the digging process again with another ill-conceived trillion dollar boondoggle, it will take years, perhaps decades, for us to climb out of that hole.
Nationwide unemployment is still teetering under 10%. For millions of families, stock market losses and unemployment have drastically eroded savings and retirement nest eggs. New home sales fell in 3.6% September, the first decline since March of this year. Even though the economy grew slightly, residential home foreclosures reached an all-time high during the third quarter of 2009. Consumer confidence also fell significantly during October.
I’m not trying to throw a wet blanket on economic recovery; my family needs it just as badly as everyone else does. But times are still tough, and the decline in consumer confidence is a clear signal that the American people still have not seen any measurable economic recovery. Specifically, they are not buying the Administration’s silly “jobs saved or created” claims, since they can see with their own eyes that businesses are still laying off far more people than they are hiring, and that small, family-owned retail stores and boutiques are struggling to stay open. And as Paul Mirengoff just noted, if the Bush tax cuts are allowed to expire at the end of next year (meaning, of course, a net tax increase for everyone) then the recovery curve may be flattened out even more.
Banks and financial institutions, which received hundreds of billions of dollars in government aid during the last twelve months, seem to be doing quite well. But for the rest of us, a “jobless recovery” is really not a recovery at all.