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Recession over, but recovery still hurts

October 28, 2009 12:00:00 AM PDT
Is the recession is over? New figures show the economy is finally growing again, but unemployment remains high and the recovery is expected to be a long one.The U.S. Commerce Department's report on a rise in gross domestic product is one of the strongest signs yet that the recession is over. But it may not feel that way to you.

If we learn anything from history, climbing out of the deepest recession ever will be like three steps forward and then two steps back.

Eighty years ago the stock market had one of its biggest crashes ever, triggering the Great Depression. Things have certainly changed since then, both good and bad.

Today's healthy stock market rise is part evidence of the good. And even though we have been in one of the worst recessions in our country's history it appears the recession is technically over.

The third quarter gross domestic product numbers show 3.5 percent growth, the first time we've seen growth in more than a year.

"We've come a long way since the first three months of 2009, when our economy shrunk by an alarming 6.4 per cent," said President Barack Obama during a news conference.

"Companies are doing better and I think that is a very, very good sign, and I think it will lead to job creation in 2010," said Mellody Hobson, an ABC News financial analyst.

Unfortunately job creation is the bad and is still a problem, especially here in California.

As of the end of September, unemployment here is 12.2 percent, much higher than the national average of 9.8 percent, which is still at the recession level.

"While this report today represents real progress, the benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we're creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well," said Obama.

As much as the president's stimulus package, which includes the popular Cash for Clunkers Program and the First-Time Homebuyer Tax Credit, has helped pull us out of the recession, those are temporary.

Americans need to go shopping to sustain economic growth. But so far this holiday season store aisles have been lonely places. That means the recovery is still unstable.

The president's chief economist says the stimulus package has already had its biggest impact and probably won't contribute to much growth next year. On the other hand, the $8,000 homebuyer tax credit will likely be extended. The administration and congress like the effect it has had on the economy so far.


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