Economic Recovery (and Lack Thereof): A Status Update
Since the Great Recession officially ended in June 2009, several aspects of the economy have fully recovered from damage; household wealth and consumer spending are two prime examples. Home foreclosures and layoffs have also declined to pre-recession levels as economic output has returned to normal than stock prices have risen to record levels. But other signs, such as a stubbornly high unemployment rate and a loss of three million jobs since the beginning of the recession, speak to a still ailing national economy.
The following is a brief list of where the economy has returned to pre-recession levels and where it has not:
• Household wealth is back after a loss of $16 trillion during the recession due mostly to plunging house values and sinking stock prices. As of Q4 2012, American household wealth had risen to a net of $66.1 trillion, just 2 percent shy of the peak reach just before the recession began.
• Retail sales have recovered as consumers become more willing to spend more on shopping, dining, and traveling. This trend has led to job growth at retailers and restaurants, which have reached levels of less than 1 percent below pre-recession levels.
• Though the job market has its weak areas, layoffs are at record lows with 1.5 million jobs being cut in January, the lowest in 12 years.
• Along with a sharp decrease in foreclosures and impressive gains in the stock market, the American GDP was at $13.7 trillion during Q4 2012, just 1.5 percent below that of Q3 2007.
• The U.S. continues to have fewer jobs than at the end of 2007. The recession destroyed 8.7 million jobs and only 5.7 million have been recovered.
• The unemployment rate is 2.7 percent higher than the 5 percent rate at the start of the recession. And many more people are out of work but also no longer looking for jobs.
• Housing and auto sales are recovering but still have not reached pre-recession levels though are producing impressive growth and increased hiring.
• U.S. industrial output is getting close to its pre-recession levels but still sits nearly 2 percent below its pre-recession peak.