|

News

Economic recovery is weakest since World War II

Wednesday, August 15, 2012 | 1:46 PM



WASHINGTON, USA (AP) - The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression.

Since World War II, 10 US recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest.

The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after a recession ended.

Economic growth has never been weaker in a post-war recovery. Consumer spending has never been so slack. Only once has job growth been slower.

More than in any other post-World War II recovery, people who have jobs are hurting: Their paychecks have fallen behind inflation.

Many economists say the agonizing recovery from the Great Recession, which began in December 2007 and ended in June 2009, is the predictable consequence of a housing bust and a grave financial crisis.

Credit, the fuel that powers economies, evaporated after Lehman Brothers collapsed in September 2008. And a 30 per cent drop in housing prices erased trillions in home equity and brought construction to a near-standstill.

So any recovery was destined to be a slog.

"A housing collapse is very different from a stock market bubble and crash," says Nobel Prize-winning economist Peter Diamond of the Massachusetts Institute of Technology. "It affects so many people. It only corrects very slowly."

The US economy has other problems, too. Europe's troubles have undermined consumer and business confidence on both sides of the Atlantic. And the deeply divided US political system has delivered growth-chilling uncertainty.

As weak as this recovery is, it's nothing like what the US went through in the 1930s. The period known as the Great Depression actually included two severe recessions separated by a recovery that lasted from March 1933 until May 1937.

It's tough to compare the current recovery with the 1933-37 version. Economic figures comparable to today's go back only to the late 1940s. But calculations by economist Robert Coen, professor emeritus at Northwestern University, suggest that things were far bleaker during the recovery three-quarters of a century ago: Coen found that unemployment remained well above 10 percent - and usually above 15 per cent - throughout the 1930s.

Only the approach and outbreak of World War II - the ultimate government stimulus program - restored the economy and the job market to full health.



JLP wants late Joseph Hibbert's name cleared

 

Sunbeam Children's Home shines despite challenges

 

Diaspora backs VCB; Calls for facts before condemnation

 

VCB fans offer prayers for athlete

 

Church group plans big anti-gay march next Sunday

 

Best of St Bess!

 

PHOTO: Daddy's girl

 

Reward for St Elizabeth cricket

 

Esther Lyle makes a difference at Sunshine Auto Parts Mandeville

 

Cops get training to detect, arrest electricity thieves

 

Jamaican singer files multi-million dollar lawsuit against attacker

 

Three cops on corruption charges

 

'Black car robbers' terrorise Whitehall Gardens

 

Mandela ‘doing very well’ daughter says

 

Backlog in Mandeville garbage collection to be resolved

 

India names unchanged squad for Caribbean tri-series

 

J$101.16 to one US dollar

 

Baldwin Crescent crater endanger motorists, pedestrians

 

National footballer wanted by police returns to St Vincent

 

Trinis, Haitians, Jcans among 25 Golden Beach illegal migrants

 

Today's Cartoon