Surprise. That economic recovery we keep hearing about seems to be playing hide-and-seek.
Federal Reserve Chairman Ben Bernanke and others have said that, technically speaking, the recession is over. The stock market has been charging forward, with a 58 percent gain between the lows of March and a September peak. But companies keep cutting jobs, with the unemployment rate creeping up to 9.8 percent in September. It would already have hit 10 percent if not for discouraged workers who lost their jobs months ago and have stopped looking for work. Meanwhile, a lot of things could still go wrong, even if we pretend otherwise. Here are some of the misconceptions about the economic recovery:
A recovery will be consistent and quick. We seemed to plunge into recession with reckless abandon, so it would be nice to think that once we've bounced off the bottom, we'll climb right back out. But that's not how recessions typically end. "Recessions are stop-and-go affairs," says economist Gary Shilling. "Seven of the last eight recessions have had at least one positive quarter before the recession picked up again." Instead of a pronounced recovery, it's more likely we'll muddle along for months, maybe even years.
There won't be another recession. Sure, economic growth is probably positive right now, which would technically indicate that the recession is over. But that doesn't guarantee that the economy will keep growing. A bust in commercial real estate is still in the beginning stages and could persist for a couple of years. Bank losses on mortgages and consumer loans are getting worse, not better. And few, if any, parts of the economy are strong enough propel a robust recovery. Moody's Economy.com says the odds of a doubled-dip recession - another six months or more of declining economic activity - are 29 percent. That's lower earlier this year, but not low enough.