The National Bureau of Economic Research (NBER) declared yesterday that the Great Recession was officially over as of June 2009.
Yes, instead of great cheers of relief, this announcement was pretty much met with silence. Why should you be cheering, even if no one else is?
True, this recessionhas left devastation in its wake. It still feels like a recession for the 14.9 million Americans who are unemployed. It feels like a depression for the 6.9 million who've been unemployed for more than 27 weeks, and the 2.4 million who have just given up looking for a job.
It feels like a recession for the more than 300,000 homeowners who lose their homes to foreclosure each month. And to those who'd like to retire, but can't because they lost money in their IRAs and 401(k)s.
However, even for those who have been hit hard by the recession, the NBER announcement provides a ray of hope. Here's why.
The NBER analyzes lots of data, including GDP, income, employment, industrial production, and wholesale-retail sales. This data has looked strong enough for long enough for them to declare that the start of the rising phase of the business cycle had begun last July. The NBER reminds us that
Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.
In other words, it is normal for the recovery to look anemic in the beginning. Those who say we are headed for a double-dip recession seem to be ignoring this fact.
What It Means to You
The economy is slowly improving, but it has shifted. This means you can start to plan for a better future, but you've got to be armed with knowledge. For example, if you're an unemployed construction worker, housing construction won't be coming back for a few years (most likely). Think about retraining in the health care field, which has been hiring steadily throughout the recession. In any case, think about how you can bring in more than one stream of income. Is there a hobby you can start making money from?
If you haven't talked to your financial planner in a year, give her/him a call. If you don't have one, get one.
If you are a business owner, think about how you can add value. Research shows that shoppers will drive further if they feel they are getting a good product or service for the price. In this way, you can keep your prices (and your margin) stable.
These are just a few ideas. Brainstorm more to fit your own personal situation. Dare to hope that things will get better, and take action. It's a heck of a lot better than waiting for the other shoe to drop.
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