Articles

Recession Over But Pain Persisits, WSJ

National Bureau of Economic Research Calls End to Recession in June 2009, Longest Since 1930s; Jobs Recovery Still Slow.

See Chart of Recessions since 1929

It's official: The 2007-2009 recession, which wiped out 7.3 million jobs, cut 4.1% from economic output and cost Americans 21% of their net worth, marked the longest slump since the Great Depression.The recession that started in December 2007 ended in June of last year, according to the NBER, but weaknesses still abound for the U.S. economy. Sara Murray discusses. Also, Neal Boudette discusses the possibility that China's biggest automaker may seek a stake in General Motors, which is now preparing for a post-bankruptcy IPO .The end of the recession occurred in June 2009, 18 months after the economy began sliding into a downturn in December 2007, said the National Bureau of Economic Research's Business Cycle Dating Committee, a group of academic economists that determines the widely accepted benchmarks for U.S. recessions. The next-longest postwar slumps were those of the early 1970s and the early 1980s, both of which lasted 16 months.But while the declaration marks a milestone, the economy still faces stubbornly slow growth and thus persistently high joblessness. That point was driven home by a report Monday from the Organization for Economic Cooperation and Development in Paris, which said it doesn't expect the U.S.'s unemployment rate to fall to prerecession levels until at least 2013.
By Sara Murray, Sept. 21, 2010 WSJ

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Wall Street’s Profit Engines Slow Down, WSJ

Inside the great investment houses on Wall Street, business has taken a surprising turn — downward...The downward slide on Wall Street parallels a similar shift in the broader economy, which has slowed considerably since showing signs of a nascent recovery this spring. And if banks come under pressure, all but the safest borrowers may struggle to get loans. ..With less than two weeks to go in the third quarter, companies will be hard-pressed to fulfill earlier, more optimistic expectations.

Even after taxpayer bailouts restored bankers’ profits and pay, the great Wall Street money machine is decelerating. Big financial institutions, including commercial banks, are still making a lot of money. But given unease in the financial markets and the economy, brokerages and investment banks are not making nearly as much as their executives, employees and investors had hoped. After an unusually sharp slowdown in trading this summer, analysts are rethinking their profit forecasts for 2010. The activities at the heart of what Wall Street does — selling and trading stocks and bonds, and advising on mergers — are running at levels well below where they were at this point last year, said Meredith Whitney, a bank analyst who was among the first to warn of the subprime mortgage disaster and its impact on big banks. Worldwide, the number of stock offerings is down 15 percent from this time last year, while bond issuance is off 25 percent, according to Capital IQ, a research firm. Based on these trends, Ms. Whitney predicts that annual revenue from Wall Street’s main businesses will drop 25 percent, to around $42 billion in 2010, from $56 billion last year.
By Nelson D. Schwarz, Sept. 19, 2010 WSJ

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Recession May Be Over, but Joblessness Remains, NYT

The United States economy has lost more jobs than it has added since the recovery began over a year ago...Yes, you read that correctly.

The downturn officially ended, and the recovery officially began, in June 2009, according to an announcement Monday by the official arbiter of economic turning points. Since that point, total output — the amount of goods and services produced by the United States — has increased, as have many other measures of economic activity.But nonfarm payrolls are still down 329,000 from their level at the recession’s official end 15 months ago, and the slow growth in recent months means that the unemployed still have a long slog ahead.“We started from a deep hole,” said James Poterba, an economics professor at M.I.T. and a member of the National Bureau of Economic Research’s Business Cycle Dating Committee, which declared the recession’s end. “And clearly the bounce-back has not been immediate after hitting this trough.”The declaration of the recession’s end confirms what many suspected: The 2007-9 recession was not only the longest post-World War II recession, but also the deepest, in terms of both job losses and at least one measure of output declines.
By Catherine Rampell, Sept. 20, 2010 NYT

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New York Housing Market Flirts With Stability, NYT

The prospect of a return to seasons in real estate — a busy spring and fall, slow summer months and a sleepy market during the holidays, followed by bonus-driven sales from the start of the year to spring — is itself cause for some muted celebration.

The story of the national housing market — and the somewhat less tumultuous New York City subplot — has been one of great extremes: bubbles, booms and busts, crashes and comebacks, misery and euphoria. So what to make of it now? After weeks of gloomy national news fanning fears of a double dip in the market, New York City’s largest brokerage firms are reporting something of a rebound and, with a sense of relief, even a possible state of stability. “It is too soon to tell about a return to normalcy,” said Noah Rosenblatt, an independent broker who publishes real estate data on his Web site, UrbanDigs, and has been analyzing recent property listings, new contracts and sales. “It looks to me that we hit the bottom” in the sales slump that drove home prices down, he said, and that “activity is starting to really pick up.” The major brokerages agree: prices, while low, are holding steady; inventory over all appears to be at a relatively healthy level; and sales have risen substantially over the last six months. The exception was a slightly slower-than-normal summer, but it came after a slightly better bonus season earlier in the year, and there are now reports of a more typical post-Labor Day upswing.
By Sara Kershaw, September 16, 2010, NYT

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