By Brian Summerfield, Online Editor, REALTOR® Magazine
The latest in a crowd of pronouncements that the recession is officially behind us comes from economic analyst Barry Ritholtz, whose book I reviewed a while ago. Ritholtz, one of the most bearish commentators during the downturn, believes that the economy has finally turned a corner (hooray!), but adds that “zombie bears” who have staked their reputations on the idea that we’re stuck in the doldrums won’t acknowledge it.
Now, calling the end of the recession isn’t exactly a new trend. (In fact, I wrote about it more than a year ago.) But Ritholtz may well be right. I, for one, hope he is. And the chorus he’s joining seems to have gotten much louder in the past few months. (If they’re correct, though, why the need for QE2?)
Here’s the thing, however: Even if they are right, Ritholtz and other economists are speaking about the recession in a very narrow, literal sense. When they say it’s over, what they referring to is a return to a sustained period of growth at the macroeconomic level. They aren’t arguing that economic normalcy for consumers is just a few weeks or months ahead, or that we’ll return to full employment soon, or that housing values will shortly ratchet back up to 2005 levels. Most importantly, it doesn’t mean that continued recovery is a sure thing.
What it could mean, though, is that financial institutions, feeling more secure, will start to lend again. Businesses of all sizes could slowly but surely begin hiring again. And consumers who rightfully put the brakes on spending and began saving at a rate not seen in more than a decade may begin to put some of their accumulated capital toward a home purchase.
In short, it might signify that after searching for a floor during these past couple of years, the economy is finally starting to move in the right direction. That’s something we could all be thankful for.
Editor’s Note: Because of the holiday, there will be no Daily News on Thursday or Friday. Happy Thanksgiving from REALTOR® Magazine!