The Light at the End of the Recession Tunnel

2008 was the beginning of the worst economic recession in decades, but several pieces of key economic evidence offer hope that we are starting to recover from the crisis.

After the stock market crash of 2008 and the resulting topple into recession, it’s been a bumpy ride economically. For years it has seemed like the only economic news we get is bad news.

Although it is certainly starting to feel like the next stop will be Mel Gibson looking over an apocalyptic America full of leather-clad biker gangs, there may still be hope yet. Even though unemployment in December was dismal at 10 percent, there is evidence that we’ve finally reached the bottom and are starting the trudge back. Here are four key economic indicators that we are starting to turn from recession to recovery.

Housing

January of 2009 was the worst month on record for home prices according to the S&P Case Shiller. However, as hard as it may be to believe right now, we’re actually starting to recover from the housing collapse. From November of 2007 to November of 2008, home prices on average dropped 18.2 percent. Last year, home prices fell only 5.3 percent.

Retirement

Things are also looking up for your nest egg. At the end of December 2008, the average 401(k) balance was $50,200. But at the end of last year, that balance was $64,200. That’s a 28 percent increase. Not incidentally, the S&P rose 24 percent last year.

Debt

If there is a silver lining to the Great Recession, it may be that Americans are finally starting to reign in their debt. Consumer debt is at $2,000,464,000,000, according to the latest statistics. That’s about $100 billion less than where Americans were last year. Reports show consumers saving more and using their credit cards less. While this slower spending may make a recovery seem slower, it will mean a more sustainable future for the nation.

The Bottom Line

America may not be living in the roaring ‘90s anymore, but many economic signs are suggesting that we are working our way out of the recession. In a few years we will all be heaving big sighs of relief and the 2000’s will seem like a bad dream. It’s hoped that America will learn the lessons we need to make sure it’s a dream that we never have to repeat.