Five Signs Barnake May be Right

Is US recession over?

There are still plenty who are skeptical that the recession has ended. Still a number of positive trends support Fed Reserve chief Ben Bernanke’s statement that the recession has “very likely” ended.

Here are five signs which show that Bernanke may be right

1. Stock market is acting more like a bull than a bear. Standard and Poor’s 500 stock index is up 58% from its March 9 low. According to Sam Stovall of Standard and Poor’s, the market bottoms a median of five months before recession ends. That is the trend for last 60 years. That means recession came to an end at the end of August.
2.  New unemployment claims are coming down. On March 28, the unemployment claims hit 674,000. Now they are down to 550,000. New unemployment claims reflect people who are getting laid off. As the economy gets stronger, fewer people get displaced and claims levels drop, according to economist Bob Brusca. He says “It’s a very good indicator of when the recession is at its worst and when it is going to end”.
3.  Many manufacturing sectors are finally turning up. Industrial production increased by 0.8%.automobile production has by 43% in July and 12 % in August. Much of increase is due to “Cash for Clunker’s” program. In  steel industry, production has increased sharply from May to August, as it sells lot of products to the auto industry.
4. Gasoline usages have increased from the past three months, indicating that more people are commuting or shopping. It also could be result of low prices as compared to last year’s. “ It could be a sign that we are moving out of recession”, says economist John Felmy who is with American Petroleum Institute.
5. Demand for freight transport is rising according to Freight Service Transport Index. This index measures the output of trucks, railroads, inland waterways, pipelines and air freight.  There is increase since February. Upturns in this index is parallel to upturns in economy says  Ken Notis, an economist  from Bureau of transportation.