NBER: Recession ended in June 2009

Recession officially ended in June 2009

The National Bureau of Economic Research (NBER) issued their findings today that the recent economic downturn in the United States was 18 months long and ended in June 2009. The longest and deepest recession since the Great Depression.

The NBER acknowledged the risk of double-dip recession in its statement, but said "The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date."

The committee that made the finding said it "did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity." Rather, it decided that June was when the economy hit bottom, and that it has been slowly but steadily growing since then.

The NBER has been tracking business cycles since World War II.

The NBER typically takes a long time to declare the start and end of recessions, waiting for all the economic data to be revised and finalized and making sure that any change in direction of the economy is long-lasting. It didn't declare that the recession started in December of 2007 until a year later.

In addition to looking at gross domestic product, the broadest measure of the nation's economic health, the NBER also weighs employment, industrial production, income and sales for determining when the economy changes direction.

While this is interesting from an economic and business cycle perspective, many American's are still feeling the effects of slow recovery.

September 19th - The Week Ahead

Check out what is happening in business, markets, and politics this week at Fox News' The Week Ahead.

Highlights:

Numbers come out for housing data

Numbers are expected to show slight improvement from earlier in the summer.

Reports on housing data for August are due next week, with a number of metrics to show modest recovery from July, according to Briefing.com. July is typically the strongest sales month of the year, but tax credits had pulled sales forward into April. More broadly, the industry is suffering from the expiration of the credit, as well as high unemployment and low consumer confidence.

Warning: Tax Increases May be Bigger Than They Appear

New legislation for taxes are up for debate in Congress this week. As with all rounds of tax talks there are cuts and increases mingled together.

The American Enterprise Institute had this to say about it:

In 2010, the top income tax rate bracket for ordinary income is 35 percent. Besides wages and interest income, this income category includes profits from pass-through business firms—sole proprietorships, partnerships, and S-corporations. Under the president’s proposal, the top bracket will rise to 39.6 percent. A stealth provision that phases out high-income taxpayers’ itemized deductions will also be reinstated, adding another 1.2 percentage points to the effective tax rate, bringing it to 40.8 percent. Wages and some of the pass-through income will also remain subject to a 2.9 percent Medicare tax. These 40.8 and 43.7 percent tax rates, which will apply in 2011 and 2012, match the 1994 to 2000 rates—the same top bracket, stealth provision, and Medicare tax were in place then.

But the picture changes in 2013. Under the healthcare law adopted in March, the Medicare tax will rise that year, from 2.9 to 3.8 percent. Also, a new 3.8 percent tax, called the Unearned Income Medicare Contribution (UIMC), will be imposed on high-income taxpayers’ interest income and most of their pass-through business income that’s not subject to Medicare tax. So, under the president’s proposal, virtually all of top earners’ ordinary income will be taxed at 44.6 percent, starting in 2013. We’re not just going back to the Clinton-era rates of 40.8 and 43.7 percent.

A similar pattern holds for capital gains. Under the president’s plan, in 2011 and 2012, the top rate on gains, now 15 percent, will go to 20 percent, with the stealth provision adding 1.2 percentage points, sending the tax back to its 1997–2002 level of 21.2 percent. Starting in 2013, though, capital gains will also be hit by the UIMC, pushing the rate to 25.0 percent.

This will push the top tax rates for most income above Clinton-era levels by 2013.

Best Cities to Survive the Recession

CNNMoney.com reports on America's most recession-proof cities with the 20 strongest and 20 weakest cities.

Leading the "Strong" list: Omaha, Nebraska
Overall, the Wisconsin to Texas corridor is holding up quite well.

Leading the "Weak" list: Las Vegas, Nevada
Followed closely by major cities in California and Florida.

Apparently the Bible Belt is a better place to be during a recession than "Sin City". Just food for thought..

September 12th - The Week Ahead

Check out what is happening in business, markets, and politics this week at Fox News' The Week Ahead.

Some highlights include:

Congress Returns to The Hill

Investors will be watching Congress next week as lawmakers return from recess and begin their review of tax measures proposed by President Obama in an effort to get the economy growing again at a healthy rate.

The president this week proposed new tax credits and write-offs for business investments, but it is unclear whether Congress will come up with the votes before lawmakers leave Washington again after only a few weeks to campaign before the hotly contested midterm elections Nov. 2.

Consumer and Producer Price Indices Release

The government will release its August Producer Price Index, which measures wholesale inflation, and Consumer Price Index, which reflects changes in retail prices, on Thursday and next Friday, respectively. Out Wednesday are August figures on industrial production. Reports on regional economic activity are due Wednesday for New York and Thursday from the Philadelphia Fed.

Foreign Currency Hearings

Treasury Secretary Timothy Geithner is slated to appear Wednesday before the House Ways and Means Committee to discuss concerns about China's valuation of its currency. Lawmakers continue to express frustration about the slow appreciation of the yuan, which has risen less than half a percent since China's June decision to drop a de facto peg to the U.S. dollar.

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