Ball State Economist: Recession is Over

I would file this under "bold statement," although we all hope it’s true:

Michael Hicks, director of Ball State’s Center for Business and Economic Research (CBER), says today’s announcement that the economy grew by an astounding 5.7 percent in the fourth quarter of 2009 officially shuts the door on the recession.

The first estimate by the U.S. Commerce Department put fourth-quarter gross domestic product growth at its fastest pace since the third quarter of 2003. Hicks said the recession that began in late 2008 will be ranked the third or fourth worst post-World War II economic setback.

However, he points out the decline in wealth in homes and stocks was the worst since the Great Depression.

"The down side is that the third quarter annual growth rate of 2.2 percent, was disappointingly low coming out of such a deep recession," Hicks says. "While today’s numbers are good, they may well be revised downward significantly as we saw for the previous quarter."

"While this has not been the worst postwar recession, the recovery may well be. I’m expecting it to be late summer before we see the unemployment rate to show any permanent decline. Real job creation won’t materialize until nearer the retail holiday season later this year."