Two years after end of Great Recession, how are we doing?
The Great Recession officially ended in June 2009. That's apparent on Wall Street, less so on Main Street. But the economic recovery is gradually being felt in places like Poughkeepsie, N.Y.
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Mr. Hong landed a job, but Ms. Hong, who has bookkeeping and administrator skills, could not find anything. She started an online forum for other out-of-work people.Skip to next paragraph
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After months of "not even getting a call back" from the companies she sent her résumé to, she's working two part-time jobs, she says. And she's more optimistic about her search for full-time work. "I see more out there," she says.
One of Hong's concerns: the price of gasoline.
Indeed, over the past two years, that cost has risen considerably. In June 2009, the price of a gallon of gas was $2.63, according to the Energy Information Administration. By the beginning of this month, it was up to $3.98 – an increase of $1.35.
However, analysts expect gasoline prices to fall at least 40 cents a gallon by midsummer.
The price of gas may not seem like something that would concern the Federal Reserve. But the nation's central bank has been watching the rise carefully because of inflation concerns, said Fed Chairman Ben Bernanke at the end of April.
Falling gasoline prices would be a relief to Souriya Inthirath, who works as a bartender at Bull and Buddha in Poughkeepsie. Mr. Inthirath drives an hour in his SUV to get to his job. Back when gasoline was $3.20 a gallon, a dollar per gallon less than he pays now, fuel cost him $400 a month. Now, he's "definitely" going to look for a vehicle that's more economical or find a way to cut down on his commute.
Aside from gasoline prices, another weight on the economy is the housing market. Overall, the value of US homes has fallen about $7 trillion since 2006, says Mr. Zandi, using Federal Reserve data. "On a real basis, home equity is back to 40 to 50 years ago," he says.
Home prices hit bottom in 2009, but now, some economists think a "double dip" in prices is taking place. The main reason, says economist Patrick Newport of IHS Global Insight in Lexington, Mass., is the huge number of foreclosures still in the pipeline – estimated by the Fed to be more than 2.2 million.
Mr. Newport expects home prices to fall another 5 percent this year. But if the labor market continues to gain ground, the number of foreclosures should drop. "Our projection is that things will begin to improve going forward, but at a slow pace," Newport says. "We won't be back to normal until 2014."
An improving housing market in Poughkeepsie could be a harbinger for the rest of the nation. Home prices fell 10 percent last year and are down 5.5 percent this year, says Gene DeMarco, the city commissioner of assessment. But, he says, he recently saw a house sell for $340,000 after initial estimates that it would go for $240,000 to $275,000.
"The houses that sell seem to be selling for decent amounts," he says.