Is the recession really over if it still feels like a recession?
Most Americans think not.
June marks the 2nd anniversary of the end of the recession, so we added a question to our regular series of consumer sentiment questions, and while it’s no secret that Americans aren’t happy with the direction of the economy, the results were still stunning: two thirds of Americans – 66% — believe the U.S. economy is still in recession.
The poll questionby HPSInsight and CivicScience gave respondents the option of indicating that while the recession may have ended, it still feels like a recession – a view of another 29% of respondents.
The National Bureau of Economic Research’s (NBER) Business Cycle Dating Committee – the official arbiters of peaks and troughs in the business cycle – avoids voicing “happy talk” when it marks the end of a recession. (Economics isn’t called the “Dismal Science” for nothing!) They merely determine that economic conditions have ceased to decline, and indeed the data shows a slow recovery since June 2009, albeit supported by ample fiscal and monetary stimulus.
But Americans generally aren’t interested in what an obscure group of economists say. They’re far more concerned about the evidence they witness in their own households and communities: the availability of jobs, levels of real income, and prices for the things they buy, like housing and consumer goods.
A stream of recent economic data shows that Americans have good reason to be concerned. While gas prices have eased from their highs, recent weak reports on GDP, jobs, incomes, and housing are all pointing to very soft economy.
Consumers lacking jobs and rising incomes, stuck in homes of declining value -- all while facing higher food and gas prices – generally aren’t happy. Worse, they’re disinclined to borrow and spend. And consumers disinclined to borrow and spend are a real problem for an economy where consumers represent 70% of GDP.
We may be two years into an economic recovery, but the recession was deep and damaging, and we’re a long way from consumers losing that recessionary feeling.
Tony Fratto, is a Managing Partner at Hamilton Place Strategies, former Assistant Secretary at the U.S. Treasury Department, and a former White House official. He is also an on-air contributor for CNBC and founder of the policy discussion website rooseveltroom.net You can follow him on Twitter at http://twitter.com/TonyFratto.