Cushman & Wakefield Research Honcho Declares the Recession Over

As many of you know I have been reluctant to call an end to the recession despite the growing chorus of optimism about the economy and the increase in equity markets. I believe we need hard evidence before we talk about the end of the recession. Enough of that evidence is now here for me to feel comfortable saying that the recession is over. My guess is October or November will be designated as the trough in the economy.

The latest piece of evidence is the steep drop in new unemployment claims. In the latest week claims fell 35,000 to 466,000, the lowest level in more than a year and the first time below 500,000 since January. In every recession, a steep decline in new claims (i.e. layoffs) has been a telltale sign of the recession’s end. This report suggests that the November employment report, while likely to still be negative, will be much better than anything we have seen since the collapse began in October 2008.

The national recovery has begun. Employment will grow in 2010. I am somewhat more optimistic than the consensus on employment growth because the cuts were so sharp that I expect once demand increases businesses will have to ramp up quickly. 

“Fortunately, this morning’s report reinforced that view,” Mr. McCarthy told The Observer on Friday afternoon. “It’s still declining, but within the margin of error of these statistics. … Nothing is great, but everything has turned. And what we’re looking at here is more about direction at this point.”

drubinstein@observer.com