Recessions's end? Where's the spending?September 21, 2010: 1:55 PM ET
The Great Recession might have officially ended well over a year ago, but consumers sure haven't been acting like it.
Officials this week might have declared an end to the longest U.S. recession since the Great Depression, but consumer and retail trends indicate anything but an end of slumping sales in housing market-related industries. The recession, which the National Bureau of Economic Research says actually ended in June 2009, lasted 18 months, besting two prior recessions by two months. The report raised eyebrows, since things haven't exactly been rosy since the June before last, but the NBER was clear to say the end of a recession doesn't equate with the idea of the economy being back at full speed-- only that the economy has actually stopped contracting.
Consumers have continued to buy "small comforts" such as alcoholic beverages, as well as sporting goods and hobby equipment, according to Sageworks, a Raleigh, N.C.-based financial analysis and information firm. After consecutive drops in 2007 and 2008, sales also picked up for personal items such as drugs at pharmacies. Beer, wine and liqour store sales, as well as online shopping sales, saw the biggest recoveries out of the more than 20 industries Sageworks analyzed. Alcoholic beverages sales rose by 3.7% during the past 12 months, while online shopping sales grew by 3.6% during the same period.
However, housing-related industries haven't shown many signs of a rebound, indicating that the U.S. real estate market remains quite fragile more than a year following the end of the Great Recession. Sales in cement, concrete, lumber, wood and other construction materials have have continued to drop since around 2007. During the past 12 months, sales in those industries fell at a range of 17% to 22%.
Also, consumers still aren't purchasing big-ticket items such as vehicles, recreational vehicles and furniture, at least at levels seen before the recession that the National Bureau of Economic Research says started on December 2007. Thus while economists looking into our recession say it met its technical end in mid 2009, it seems that's not something most Americans have personally experienced when looking into their own pocketbooks.