Recession might technically be over, but recovery takes time
Oct. 17, 2010 at 5:17 a.m.
The announcement came Sept. 20: the long recession was over.
In fact, it had been over for more than a year, according to financial gurus with the National Bureau of Economic Research, which analyzed gross domestic product, gross domestic income and other factors to come to that conclusion.
But, just because the recession might technically be at its end, it doesn't mean change is here just yet.
Financial experts say it might still be a while.
It often takes time for the effects of a recession - or its end - to trickle down to everyday people's lives, said Lynn Miori, a certified public accountant with KMH Wealth Management.
"It might not feel like it to the ordinary person, but it ended a year ago," she said.
The recession transformed most people from spending consumers to saving consumers, which was probably a change we needed to undergo anyway, Miori said. People lived above their means, spending heavily with credit cards. Credit is now harder to come by, she said.
"We're forced to turn to saving money and paying as we go," she said. "And that's probably a good thing."
Linda Jimenez, a certified nursing assistant in Victoria, agreed it took a while for the Crossroads to feel the effects of the down economy. Her friends in Houston began discussing rising layoffs and other hardships before Victoria saw such issues.
"Then, all of the sudden, it was here," she said. "And it's been hard on a lot of people."
Jimenez didn't completely buy into the idea that the recession has ended, she said.
"They're trying to make us feel better," she said of the financial analysts who made the announcement. "Or trying to make themselves look better."
Things are looking up in some areas, said Jack Kashouty, a certified consumer credit counselor with the Consumer Credit Counseling Service of South Texas. Lifting the oil moratorium will generate additional income and jobs for people.
People should still be wary of spending and keep their priorities in order, he said. Keeping a roof overhead and food on the table should be among the top concerns, while insurance, taxes and medications also top the list.
"I think the recession, depression or whatever you want to call it was a little deeper than people anticipated," he said. "It's not over yet."
Unemployment rates are another indicator that recovery isn't here yet, said Steve Orr, president and owner of Orr Financial Group.
Unofficially, about 17 percent of the nation's population remains underemployed or unemployed, he said, explaining that official rates only include people who can be tracked, such as those who have filed for unemployment insurance.
Recovery will be slow, Orr said, and most people predict the United States will experience a volatile market for the next two years. The market will likely improve after 2013.
Some actions the government is taking actually hinder the recovery process, Orr said.
Artificially holding down interest rates, for instance, means that rates could rise quickly and drop bond values, he said.
He advised investors not to focus solely on stocks and bonds, but to look into other investment opportunities, too, such as equipment leasing or oil and gas.
All in all, things are slowly on the upswing.
And Jesus Lira, a Victoria cook, said he sees it. Money is still circulating and people are going places, but times are hard.
"It might not be as bad as it was, but it's still there," he said. "You still see people struggling."