Is the Recession is Over?

So, the chairman of the Federal Reserve Board himself has said it publicly that it looks like the recession is over. Here comes the recovery!

But there was a significant footnote in Bernanke's speech on the economy last week in Washington: Don't look for a dramatic recovery. Bernanke expects that it will be a slow moving, plodding sort of improvement where the economy inches toward expansion and that there won't be a sudden, dramatic return to economic boom anytime soon.

Bernanke's point about the end of the recession was underscored by a 2.7 percent jump in retail sales for the month of August. This is an important indicator because the key to stimulating the economy again is to get consumers spending, which appears to be happening. Not just for auto sales, which got a big boost in August from the government's "cash for clunkers" program, but also for other important categories, like food and clothing purchases, department store retail, entertainment and restaurant spending, sporting goods. All of these categories were up for the month, after having been down for well over a year.

This is good news! People feel more confident about the direction of the economy in the months ahead. They see the stock market up, so their retirement funds and 401 K plans are bouncing back. They see home values stabilizing or growing in most areas, so their equity is beginning to increase again.

It seems as though, perhaps, the recession is over!