Five Measures of Economic Recovery: Percent Up From the Bottom

No one doubts that we are in a period of economic recovery from the economic Great Recession whose bottom was reached in the dismal Spring of 2009. Almost every economic indicator known to man plunged in those days, most prominently among these were the following very important five measures of the health of the economy:

(1) Dow Jones Index
(2) Consumer Confidence Index
(3) Industrial Production
(4) Job Loss (This is a lagging indicator, and bottomed in January 2010).
(5) Residential Housing

We will have fully recovered from the Great Recession when all the indeces are back to where they were at the start of the recession in January of 2008, or 100% up from the bottom of the recession in the spring of 2009.

The above chart shows the 5 indicators, scaled so that all 5 bottoms are aligned to a level of -100%. This allows comparisons to be made among the indicators; so we can meaningfully judge which sectors of the economy are recovering faster and which are recovering slower. The story is in the chart above, and the results are summarized below, according to the amount of recovery in %, from the bottom point of the recession:

(1) Dow Jones Index
             Best in show recovery. The Dow is up 99% from the bottom, and back to where it was at the start   
             of the recession, near DOW 13,000. The peak in the Dow was in October 2007, over 14,000.
(2) Consumer Confidence Index (CCI)
            The CCI is the most skittish of indices, exhibiting wild fluctuations month to month. The CCI is up
            73.5% from the bottom.
(3) Industrial Production
             Industrial Production is up 73.3% from the bottom of the Great Recession, doing well.
(4) Job Loss (This is a lagging indicator, and bottomed in January 2010).
            Job Losses are only up 36.1% from the bottom, showing that unemployment is the second most
            recalcitrant, and first most painful to Americans of all the indicators.
(5) Residential Housing
           Residential Housing is the slowest of the 5 indicators, only up 14.4% from the recession bottom
           The economy will not recover without a recovery in housing.

So the reports of a healthy economic recovery, like Mark Twain's death, are premature. Celebration is certainly way prematur, since the most important and most painful of economic measures, jobs and housing, are still moribund, four whole years after the start of the recession.

The rooster may crow, taking credit for the sunrise. And Obama may crow, taking credit for the most anemic recovery in history. But all the chickens will come home to roost in November.