WASHINGTON (AFP) – The US economy exited recession in June 2009, the National Bureau of Economic Research said Monday, officially calling the end to the longest downturn in more than half a century.
More than eight million jobs were lost in the slump that was triggered by dodgy Wall Street mortgage investments.
|(AFP file) People seeking work wait outside a job fair in New York.|
President Barack Obama said the end of the "Great Recession" would come as little solace to the millions of people who are still out of work
"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 the bills day to day, it's still very real for them."
The NBER, a non-profit research group recognized as the arbiter of US economic cycles, underscored that slow pace of recovery, as it issued a statement confirming "the recession lasted 18 months, which makes it the longest of any recession since World War II."
"The committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity," it said.
At the same time panel members warned economic activity could remain below normal well into the expansion.
Earlier on Monday, the Organization for Economic Cooperation and Development (OECD) said the US economy would grow at a slower-than-expected rate of 1.5 percent this year.
The Paris-based OECD said US growth would be far less than the 3.2 percent predicted in May and would increase to only 2.3 percent next year raising the specter of a painfully slow recovery.
"The United States is slowly recovering from a severe recession... with economic growth projected to remain low for some time," the OECD said.
The body added that "unemployment is likely to stay elevated for a relatively long period."
"Continuation of targeted support for the labor market may also be necessary until private sector employment picks up more strongly."
The NBER announcement was widely expected by economists.
"What matters now is how long the recovery will take," according to Augustine Faucher of Moody's Economy.com. "The odds of a second recession are too high for comfort."
Despite economists' warnings of a double-dip recession, the panel said the economy had already recovered enough that any new slide would be an entirely new recession.
"The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007."
"The basis for this decision was the length and strength of the recovery to date."
Unlike many countries where a recession is defined as two consecutive quarters of shrinking growth domestic product, in the United States it is determined by a seven-member NBER panel.
Although the depth of the crisis had already been clear, the NBER confirmed it was longer than those which began in 1973 and 1981 and which both lasted 16 months.
The NBER announcement gave a boost to US stock markets with the blue chip Dow Jones Industrial Average surging over 145 points, or around 1.4 percent.