Recession Recovery

Information about the U.S Economy for College Students.
By: Stephani E. Williams

The U.S Federal Reserve Chairmen Ben Barnanke made a statement in a question and answer session at the Brookbridge Institution that the, "recession is very likely over at this point..." Bernanke repeated throughout the session that the credit conditions of the U.S Economy and the labor market will prove to be challenge to pull through. Also, he said that the economic recovery was "under way." The economy will seem to be still very weak with the the employment rate still declining . Predictions of the Unemployment Rate, by the end of December 2009, will gradually increase from 9.7% to 10.2% before it actually starts to gradually decline. He also said that the economy will start to grow in the second half of 2009, but not enough to led to a rapid recovery. There will be moderate growth and unemployment "will come down , but it will take some time." The session went on discussing the increase in retail sales in August from the "cash for clunkers" program. Thanks to the government.
Economists are thrilled to see firsthand that there is starting to be a boost in the economy again. Some go on to say how "The consumers are back in the game in a big way,"said Chris Rupkey, "the outlook for the economy just brightened considerably." Presently, consumer spending accounts for two-thirds of the demand in the economy. The consumer is still struggling though with a huge household debt and the high Unemployment rate. Economists are trying to get consumers back into stores and malls, in which some states have cut taxes temporarily during August, traditionally a month of tax relief for students heading back to school in the fall. Miller Tabak analyst Dan Greenhaus said, "There is little doubt that consumer spending will contribute in a positive fashion to third-quarter GDP... but as we enter the fourth quarter, real questions remain as to how much consumer spending can/will increase in the face of tighter credit conditions, an overwhelming short-term savings imperative and a labor market that remains weak."
As signs of economic recovery begin to become clearer and in sight, there is still a concern that the government has not done enough to defend against the next financial crisis. Bernanke expresses that he has "confidence in our policymakers and they will move forward on plans to overhaul the nation's finance rules." He said, "I remain petty optimistic that comprehensive reform will be coming." Bernanke also expects that "the market will come back." He assures the public that there are encouraging signs that the market is improving but, also said in his statement that the market will probably " will not return to the size it was before."