MISSION ACCOMPLISHED: Bernanke declares recession over

[Statistical]

Federal Reserve Board Chairman Ben Bernanke said Tuesday that the recession has ended -- at least based on the numbers.

"From a technical point , the recession is very likely over at this point," Bernanke told a conference at the Brookings Institution.

But Bernanke said there is a "risk" that labor markets will remain weak through 2010 because growth will be too anemic to create jobs. Bernanke noted that many economists now expect the labor market to recover slowly. But he said this was only a forecast and might be wrong. Bernanke also expressed confidence that Congress would complete work on new rules for Wall Street.

...

Since the August remarks, Bernanke was reappointed by President Obama to a second four-year term at the helm of the central bank

http://www.marketwatch.com/story/bernanke-declares-the-recession-over-2009-09-15

I say declare 9/15 National Recovery Day, R-Day! With day off with pay for those who are employed and a bonus day's worth of unemployment for the 16% who are not!

[midnight]

1. Good. Now all the people I know that are unemployed can

get back to work!

[Statistical]

2. Hip Hip Hooray. Happy R-Day (recovery) for everyone!

[treestar]

9. Maybe so

Why not?

[MellowOne]

3. One more declaration that the recession is over

How many times can a recession be over anyway? Actually, he said "very likely over." In other words, he knows we are in deep crap.

[datasuspect]

4. yeah, but it will be a jobless recovery going forward

[BlooInBloo]

5. "From a technical point , the recession is very likely over at this point,"...

I'm having trouble appreciating the mockery and outrage of this statement.

But then again, I don't put words into it that aren't there.

[Nederland]

7. Agreed

I find it ironic that a member named 'Statistical' doesn't understand that the economic statistics say the recession is likely over.

[Statistical]

13. Well statistically a recession is 2 or more consecutive qtrs of negative growth.

The end of a recession is a qtr of positive growth. Given Q1 & Q2 were negative and Q3 hasn't even ended I just thought it funny that Bernanke was willing to jump the gun.

Are we likely going to come out of the recession in Q3 yes but I think his call is a little early.

[BlooInBloo]

19. Oh cool - I didn't realize you had access to all of the information he does - wonderful to know!

[Statistical]

21. Where did I say that?

We know Q1 & Q2 were negative. Those are known undisputed facts.
We also know Q3 is not over yet. You can confirm that yourself by checking a calender.

[BlooInBloo]

22. It's funny because in the same sentence you said his call was early...

You made the exact same call.

[Statistical]

24. It is early because..... see if you can follow.

To end a recession we need a qtr in which the GDP expands.

Q1 - GDP declined
Q2 - GDP declined
Q3 - doesn't end until Sep 30th.

So I never said the call isn't right just simply early.
Q3 hasn't ended yet, Q3 would need positive growth to end the recession.

[BlooInBloo]

25. As a statistician presumably, presumably you are aware that many, many calls...

are made early. Often with good reason. To fairly criticize this particular call, then, you must have access to all the information he is using to make the call. Thus, I compliment the availability of a wonderful DU resource I wasn't previously aware of.

This is a good thing - a very good thing indeed.

[Statistical]

29. Not the same thing....

If you make a call that the world will end tomorrow I don't need proof that it won't to critize the call.

Rather I am criticizing the fact that you can't have the information yet to definitively know the data necessary to make the call.

US Q3 GDP numbers will not be available until late October at best, prior to that it simply is a guess.

For the record I think he is right. I have said in the past it looks like economy will turn at some point in Q3 (or Q4 at the latest

More importantly the quote was taken out of context and actually was a negative quote about the economy (see below UPDATED post).

[Hannah Bell]

34. lol. it would be nice if they'd release the data *before* they spin it.

[Nederland]

26. There are only 15 days left in Q3

Do you think it's possible that Bernanke, who has access to all the latest data (which you do not), might be looking at the numbers and know that Q3 is going to end up positive?

[Statistical]

27. Maybe but...

companies don't release their numbers until after the end of the qtr.
Those numbers are compiled to determine the change in the GDP.

While it may be an educated guess it is just that.

Companies are very secretive about that data. The FED has no authority to demand the numbers early (even incomplete).

[Nederland]

30. Put it this way

If Q3 does turn out to be positive, are you going to admit that you were wrong, or will you insist that Bernanke just "got lucky"?

[Statistical]

31. No. I never claimed he will be wrong. Personally I think Q3 will be positive.

If you want check my post history I have been saying it a long time. Q3 or Q4 goes to + GDP and likely no job growth until Q2-2010.

Believing something, or making an educated guess is not the same as the recession being over.

[Nederland]

33. Ok

I'm glad you cleared that up. I too believe that the recession will officially be over in Q3.

[Auggie]

6. Thanks for the laugh

[treestar]

8. How does he define recession?

He's obviously got some technical definition of it and feels that the economy no longer fits that definition.

A lot of it is psychological anyway, so giving out good news giving people confident can't hurt.

[BlooInBloo]

12. I assume the same way almost everyone else does: 2 quarters negative gdp growth

If *you* change the definition, that's hardly *his* fault.

Changing the rules of the game midstream, and then clowning someone for not following them hardly seems sporting. But if that's what it takes to give people joy, rock on.

[nc4bo]

10. ...

:puke:

[Individualist]

11. "reappointed by President Obama to a second four-year term"

Doin' a heckuva job, Bernie!

[MellowOne]

14. Well, at least HE has a job

While millions of Americans don't because of his reckless running of the FED.

[whoneedstickets]

15. There is a very technical definition for recession..it doesn't mean just 'bad times'

And employment levels are always lagging indicators of the economic situation (thing go bad before companies lay off workers and things get better before they hire more back). He may very well be right about the recession being over -- as long as the indicators he is using aren't revised downward later -- because employment levels aren't part of the technical definition of recession.

The key issue about identifying economic cycles is that we never know for sure that one has started until we are well into it-- they are all post-hoc measures.

[MellowOne]

16. The treasury said millions more foreclosures are expected

Over 400 banks might fail by the end of the year, and the deficit is expected to be more than expected. Are these lagging indicators as well?

[whoneedstickets]

35. deficits certainly are lagging indicators...

government revenues lag economic growth peaks because of the same dynamic as jobs - income peaks come before revenue peaks and the same on the down side. On the bank failure issue, how many will fail is at best a guess. I find it encouraging that we're getting economic growth despite the housing market's slow turnaround.

[Javaman]

17. Well, isn't that special.

tell that to all the people still unemployed. I'm sure they have a vastly different opinion.

[MH1]

18. There's a technical definition of recession and if it's met, it's met

it has NOTHING to do with how individuals perceive their situation.

If Bernanke is saying the recession might technically be over, I'm sure he is basing that on data that shows that in a few months, about now will be identified as the time when this recession "ended" per the technical definition.

[Subdivisions]

20. Whew! That sucked! Ok, now, EVERBODY BACK TO WORK! n/t

[Subdivisions]

23. Denninger: 'He's correct.

The recession is over.

The Depression has just begun.'

[Statistical]

28. UPDATED. Bernanke NEGATIVE quote totally spinned by the media.

Here is the full quote:

"From a technical perspective, the recession is very likely over at this point, <however> it's still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was."

[nc4bo]

32. Nitpicking

From Bernanke: "employment status is not what they wish it was?".

WISH? Like we're all asking for fictional unicorn ponies? WISH?

How about what it NEEDS to be. NEEDS Bernanke, NEEDS.