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Investing Specialists

Looking for a Recession in All the Wrong Places

The recession officially ended in June what?


This week's announcement that the recession was over in June 2009 didn't surprise many economists, but many consumers were scratching their heads, as we discuss in this week's video.

The good news is that after such declarations, the economy almost always continues to expand for a considerable period of time based on 11 post-World War II recoveries. In other news, the markets were pleased that major real estate indicators have stabilized, albeit at low levels, after the initial tumble related to the expiration of the housing credit at the end of April.

Manufacturing news this week was decidedly mixed as the European Purchasing Managers report showed a larger-than-expected decline, while the U.S. Census Department's new durable goods order report, excluding transportation, was surprisingly robust. My personal opinion is that the market has become too fixated on manufacturing data, which at this stage of the recovery is more volatile and less conclusive than earlier in a recovery. It appears some analysts are confusing slowing manufacturing growth rates with outright declines, which isn't helping matters, either.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.