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Federal Reserve Chairman Ben Bernanke said that on September 15, 2009, the worst recession since the 1930s is probably over, although he cautioned that pain – especially for the nearly 15 million unemployed Americans – will persist. Bernanke said the economy likely is growing now, but he warned that won’t be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising. The recession, which started in December 2007, has claimed a net total of 6.9 million jobs.
With expectations for a lethargic recovery, the Fed predicts that unemployment will top 10 percent this year. The post-World War II high was 10.8 percent at the end of 1982. Some economists say it will take at least four years for the jobless rate to drop down to a more normal range of 5 percent.
Analysts predict the U.S. economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 to 4 percent. It shrank at a 1 percent pace in the second quarter, much slower than in previous quarters. While many on Wall Street have been encouraged by early signs of stabilization in U.S. home prices and hope the housing market may have hit bottom, others aren’t so sure.
Still, Bernanke’s declaration that the recession likely ended marked his most optimistic assessment yet of the economy. And his remarks came on the same day that the government report that retail sales jumped 2.7 percent in August, the most in more than three years. All this helped to lift stocks on Wall Street. The Dow Jones industrial averaged gained nearly 57 points to 9,683.41, its highest finish since Oct. 6. He said that the economy is coping with “ongoing headwinds,” including hard-to-get-credit for consumers and businesses, and households saving more, spending less and trimming their debt. Those forces can weigh down the recovery, he said.