Despite data showing that the US economy grew at its fastest rate in eight years during the second quarter of 2014, Americans still believe that the country is still in the midst of a recession.
The economy swelled during the Q2 at an annualized rate of 4.6 percent, duplicating the fastest quarterly growth since 2006. After a difficult, weather related, bad first quarter, second quarter growth was influenced by improvements in all sectors. Those growth sectors included consumer spending, residential and non-residential fixed investment, net exports and government spending.
The perception, however, is of an economy still in trouble. A recent poll done by the Public Religion Institute showed that over 70 percent of Americans thing that the economy is still experiencing a recession. This perception is not without reason: the unemployment rate is still high with millions of American not working, and the recovery is not fully realized as yet.
Two economic academics, Carmen Reinhart and Ken Rogoff have shown that post-war economies generally need, on average, four and one half years to recover back to the same GDP as they had before a financial crisis. They also found that unemployment rates take about the same amount of time to reach their low points, and housing prices can take even longer to recover. Therefore, once we realize these characteristics of recoveries, the US has truly bounced back from its 2008 crisis pretty well.