Rising Foreclosures: Is the Recession Really Over?

Intro - If you've been looking for yourself into whether or not this whole economic crisis is waning so that you can get on with planning for your finances to recover, you may have noticed that it's really difficult to get any sort of straight up answer about this topic at all. We've been told repeatedly lately, on almost a monthly basis that the recession is over from some sources; while from other sources we're being told that the recession might last into next year. However, what we're often seeing is the result of reporters using the term "recession" rather loosely, or to mean different things. The National Bureau of Economic Research defines a recession as a "significant decline in economic activity spread across the economy lasting more than a few months". They include in this economic activity not only gross domestic product but also employment, incomes/payrolls, industrial production, and sales.

Some sources define a recession only by the GDP having two quarters in decline which encompasses a far looser definition. By the NBER definition, we're currently in the worst repression since the Great Depression, though we are hopeful that things will turn around soon, it is probably too early to call it "over". Looking at the status of jobs in the US at present is tricky. While the government is distributing stimulus dollars, they are not directly translated into new jobs or more spending. The unemployment rate is still climbing though not as steeply as in previous months with the problem of a low rate of hires compounding the issue.

According to the Bureau of Labor Statistics the "non-farm payroll employment continued to decline in July" and as people continue to not find jobs, they become more discouraged and actually stop looking, believing that there just are no jobs out there to find. When you consider the real estate market at present, it is true that on average home sales are rising, however, those rises are in particular markets and particular areas. Foreclosures are still up seven percent in July over June and government stimulus dollars has yet to assist many of the home owners who're unable to pay their mortgages. In other areas that are affected by the recession, things mostly look pretty bleak; retail sales are still falling and the GDP is down one percent for Q2.

However, it looks like the stock market has rallied, which I assume is the cause of so many reports of a concluded recession. I think that the wise thing to do at this time is to take a look at all the factors contributing to our current recession together before jumping to the conclusion that it's over. Be wary of the motives behind any source claiming that the recession is over and proceed cautiously just in case.

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