Economic Pain Lingers Despite Recession’s End

VPM | By John Ydstie

Published September 20, 2010 at 7:00 PM EDT

Updated December 11, 2023

The National Bureau of Economic Research said Monday that the recession, which began in December 2007, ended more than a year ago. But leading economists — and the president — said it doesn’t mean the economy is now back on track.

The people who decide when a recession begins and when it ends are the members of the economic group’s Business Cycle Dating Committee.

Committee member Jeffrey Frankel, an economics professor at Harvard’s Kennedy School of Government, says the panel isn’t saying the economy has recovered — it has only pinpointed the month when it stopped getting worse.

“It is important to note the definition of a recession is that things are getting worse,” Frankel says. “So when we say that the recession ended, we’re not saying things are now good. We’re only saying that things are getting better.”

With 15 million Americans out of work, the number of home foreclosures mounting, and businesses still struggling it may not seem like the Great Recession is over. But officially, it ended more than a year ago — in June 2009, the group said Monday.

During a town hall meeting in Washington, President Obama said that for people suffering from the recession, the official pronouncement brings little comfort.

“Even though economists may say that the recession officially ended last year, obviously for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay their bills day-to-day, it’s still very real for them,” Obama said.

That’s not surprising, since it was the worst recession since the Great Depression. Still, it was nowhere near as severe as the Depression, when the country’s economic output plunged 27 percent.

During the recent recession, which began at the end of the Bush administration, in December 2007, the economy shrank 4.4 percent over a period of 18 months. That does make it longer than the deep recessions of the mid-1970s and early 1980s. And job losses were disproportionately high this time around, causing much of this recession’s misery.

The unemployment rate soared to just over 10 percent and remains stubbornly high at 9.6 percent.

Frankel says it might come as a surprise that job growth actually started quite quickly after this recession.

“The turnaround in the labor market is not particularly late this time compared to the preceding two recessions” of 1991 and 2000, Frankel says. “In fact, the turnaround in the labor market came earlier than in the preceding two.”

The difference is the previous two recessions were much less severe than this recession. The problem, this time, is that the unemployment hole is much deeper.

As is often the case, it took the Business Cycle Dating Committee more than a year to fix the end date of the recession. That’s partly because it was waiting for revisions in data, but Frankel says it’s also because the panel had to clear up one issue: “We had to wait until we could answer the question, ‘If there were a renewed downturn that were to hit tomorrow, would that count as a separate, second recession or part of the same recession? And until we were confident that we would be able to answer that that was a second recession, we had to wait.”

So if the economy starts losing ground again, it will not be a “double dip,” but a whole new recession. Personally, Frankel says he thinks the economy will continue to improve, albeit slowly.

That’s not likely to get Obama off the hook. At the town hall meeting on Monday, audience members expressed disappointment that there hasn’t been more progress. The president insisted his policies are having a positive effect.

“My goal here is not to try to convince you that everything’s where it needs to be. It’s not,” Obama said. “That’s why I ran for president. But what I am saying is, is that we’re moving in the right direction.”

Taking a shot at the Republican policies of the past decade, Obama said: “Something that took 10 years to create is going to take a little more time to solve.”

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John Ydstie

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.

During 1991 and 1992, Ydstie was NPR's bureau chief in London. He traveled throughout Europe covering, among other things, the breakup of the Soviet Union and attempts to move Europe toward closer political and economic union. He accompanied U.S. businessmen exploring investment opportunities in Russia as the Soviet Union was crumbling. He was on the scene in The Netherlands when European leaders approved the Maastricht Treaty, which created the European Union.

In August 1990, Ydstie was one of the first reporters on the scene after Saddam Hussein's Iraqi army invaded Kuwait. He accompanied U.S. troops to Saudi Arabia as a member of the Pentagon press pool sent to cover the Iraqi invasion for U.S. media outlets.

Ydstie has been with NPR since 1979. For two years, he was an associate producer responsible for Midwest coverage. In 1982, he became senior editor on NPR's Washington Desk, overseeing coverage of the federal government, American politics, and economics. In 1984, Ydstie joined Morning Edition as the show's senior editor, and later was promoted to the position of executive producer. In 1988, he became NPR's economics correspondent.

During his tenure with NPR, Ydstie has won numerous awards. He was a member of the NPR team that received the George Foster Peabody Award for its coverage of Sept. 11. Ydstie's reporting from Saudi Arabia helped NPR win the Alfred I. duPont-Columbia University Award in 1991 for coverage of the Gulf War. In 2016, Ydstie received a Gerald Loeb Award for financial reporting for his contributions to an NPR series on financial planning.

Prior to joining NPR, Ydstie was a reporter and producer at Minnesota Public Radio. Ydstie is a graduate of Concordia College in Moorhead, Minnesota, where he is now on the Board of Regents. He earned a Bachelor of Arts degree, summa cum laude, with a major in English literature and a minor in speech communications. Ydstie was born in Minneapolis and grew up in rural North Dakota.

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