Officially, the Great Recession is over, at least for the United States. That nation's economy recorded 3.5 percent annual growth for the third quarter of 2009. Japan is also showing signs of an uptick in its economic fortunes. It is too early to celebrate, however. The recoveries will prove fleeting if consumers do not regain confidence and provide a continuing boost to their economies. Companies have not yet resumed hiring, and CIT Group Inc.'s bankruptcy filing may cause a financing crunch for many small businesses.
The U.S. economy had been shrinking for a year. In the first quarter of 2009, the economy contracted 6.4 percent, a showing even worse than the 5.4 percent decline recorded in the fourth quarter of 2008 and the sharpest fall since 1982. The slowing of the U.S. economic engine triggered a global downturn that raised fears of another Great Depression.
Fortunately, the administration of then President George W. Bush recognized the severity of the crisis and provided emergency financing for U.S. banks teetering on the brink of insolvency. Those efforts were followed up by the stimulus measures passed by his successor, Mr. Barack Obama. A $787-billion package is still percolating through the U.S. economy, providing a much-needed boost for spending as demand evaporated. By the Obama administration's reckoning, the stimulus program has saved or created 650,000 jobs.