Tuesday, September 15, 2009

What Recession? Bernanke Says Recession "Very Likely Over"

While conservatives have screamed that socialism and Nazism have taken over the United States, the nation's capitalist economy has quietly improved. Today, Federal Reserve Chair Ben Bernanke said that the recession is "very likely over" and that he expects 3 to 4-point growth in GDP for the third quarter (which ends September 30).

Last week, the Federal Reserve released the "Beige Book," which consists of anecdotal evidence regarding the pace of economic activity across the nation. The report states that in virtually every region of the country, the economy is stabilizing and that "the outlook for economic activity among . . . business contacts remain[s] cautiously positive." Furthermore, while retail sales and housing prices remain flat, the "cash-for-clunkers" program has boosted economic activity. In most districts, manufacturing has improved.

The stock market has also shown signs of improvement. Today, as of 12:45 EST, the Dow Jones Industrial average is up 9.91%, the S%P 500 is up 16.28%, and the NASDAQ Composite Index is up a whopping 33.06% (quotes obtained from Google Finance).

Although some economic data show better returns, the unemployment rate continues to hover around 10%. Bernanke says that even if the recession has ended, this would not lead immediately to improvement in unemployment data.

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