As economy recuperates, economists declare recession ended

Not only is the recession over, it ended more than a year ago.

At least that's the opinion of a group of economists with lofty credentials.

The panel that determines when recessions start and end concluded Monday that this one ended — technically, anyway — in June 2009, and lasted 18 months. That makes it the longest recession since World War II.


Kevin Paul was. The 46-year-old Wichitan has been out of work since July 2008.

"Oh, really!" Paul said as he headed into the Workforce Alliance of South Central Kansas for the umpteenth time to seek help in landing a job. "It's going to take a while to find how it's getting better."

Those who are charged with trying to help folks work through economic difficulties agree.

"I don't see things getting better yet," said Pat Hanrahan, president of the United Way of the Plains. "We see any number of small firms say they have fewer employees. They aren't the ones that make headlines, but it's five less here, 10 there.

"We're nowhere near to the coming-back stage. Not in my mind."

Nonetheless, there are some slight signs of improvement.

For the Wichita metro area, unemployment for August was at 8.2 percent, down from 9.2 percent in August 2009, according to the Kansas Department of Labor.

Nationally, unemployment has been stagnant over the past year. It was at 9.5 percent for August, not much different than the 9.6 percent from a year ago, according to the Bureau of Labor Statistics.

The National Bureau of Economic Research, a group of economists based in Cambridge, Mass., and founded in 1920, used a number of indicators to conclude that the recession began in December 2007 and ended in June 2009.

The bureau examines the gross domestic product, which measures the total value of the economy, and reviews incomes, employment and industrial activity.

The bureau is a heady group. Sixteen of the nation's 31 Nobel Prize winners in economics have served as researchers for the panel.

The committee was quick to point out in its report that it is not saying economic conditions since June 2009 have been favorable or that the economy has returned to normal.

We "only determined that the recession ended and a recovery began in that month," the report said.

Being cautious

That doesn't come as a surprise to local economists.

"That's what I've been saying for six to nine months," said Malcolm Harris, a finance professor at Friends University. "Industrial production in the U.S. hit bottom in June 2009."

He said the national committee tends to be very cautious in making statements about the economy.

Jeremy Hill, director of Wichita State University's Center of Economic Development and Business Research, said the committee is "very legitimate."

But Hill said it doesn't feel like things are better "when jobs aren't on the ground, until we see a rise in income."

Paul doesn't need an economist to explain the difficulties in finding a job.

He resigned as a postal worker in July 2008 to seek another career, hopefully in his trade as a jet mechanic.

"Bad timing on my part," Paul said.

Since then, he said, he's sent out more than 1,000 resumes, had only three job interviews and taken every class in job hunting the Workforce Alliance center has to offer twice.

"I'm dipping down low," Paul said. "I had to take out a loan to get an apartment."

Micah Demaree, 23, said the economy doesn't affect him much because he makes so little as a waiter.

"I've had the same job since before the recession," Demaree said before shopping at Towne East on Monday. "Things haven't gotten much worse for me. Things aren't more expensive, and I still get paid the same."

True, inflation is low.

Over the past 12 months, inflation nationwide has gone up only 1.1 percent, according to the Bureau of Labor Statistics. Take out food and energy and inflation has been less than 1 percent for the same period.

Eddie George, a retiree and another Towne East shopper, has a sense the economy is on an upswing.

"Seems like people are spending more money," he said.

Rock, hard place

At Wichita's Laid-Off Workers Center, which is coordinated by the United Way of the Plains, the demand for help has dropped.

In August, the center helped 139 people, down from 460 people in August 2009.

But United Way's Hanrahan said those figures are misleading because unemployment benefits have been extended numerous times over the past two years.

Keith Lawing, director of the Workforce Alliance of South Central Kansas, is seeing the same thing.

"It's been tough to gauge the impact on individuals because of the extensions," he said.

Unemployment benefits available for Kansans range from 26 weeks to 86 weeks, according to the state's labor department.

At the same time, Kansas missed out on an emergency unemployment package approved by Congress because its unemployment didn't meet the federally required rate of 8.5 percent.

Those rate requirements work against south-central Kansas, which has a higher unemployment rate than the rest of the state, Lawing said.

"This is where it's weird for us," he said. "We're continually at least a couple percentage points above the state.

"We're kind of between a rock and a hard place."

At the same time, he said, some local trends indicate an upswing in the economy.

"We're seeing more companies hire than six months ago and certainly a year ago," he said. "But those numbers are not strong enough to offset the high number of job losses we experienced two years ago.

"We're still hearing of companies laying off in the 20s and 30s. They're just not laying off in the 300s to 1,000 like they were a year and half to two years ago."

But regardless of any of the numbers and projections, Lawing said he knows the recession is still greatly affecting the area.

"The recession hit us later," he said. "We were late getting to the party, and we're going to be late leaving the party.

"The hangover is going to last for a while at the individual level."

'Fear is the enemy'

As for whether the Wichita area's recession has hit bottom, local economists don't have firm answers.

"We have to wait," WSU's Hill said. "We have to look at all the data."

Friends' Harris said the recession has bottomed out. "Yes, absolutely," he said.

As for when, Harris said it was at least three months ago and more likely eight to 10 months ago.

"The data isn't real clear at the local level," he said.

What was clear was the message on the T-shirt that Paul was wearing: "Fear is the enemy."

"I wouldn't say I believe the economy is going to get better," he said. "But I do have faith that it's going to come along one of these days."