That’s a relief. We can now go back to spending wildly, buying houses with no money down and being stereotypical American capitalist pigs eating heartily at the trough of plenty. If you’re still employed, that is.

The Great Recession, which rolled over our financial lives like one of P.J. Keating’s giant pavers, is most likely over. Home sales, while still far below the levels of a year ago, have risen for three straight months—a first since 2004. The stock market has rallied 44 percent since March, thanks to renewed optimism and improving earnings from big companies like Goldman Sachs and Apple. In June, seven of the 10 indicators in the Conference Board Leading Economic Index pointed upward, including manufacturing hours worked and unemployment claims.
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Irrational exuberance, it’s not. But even stagnation would be an improvement over recent history. [...] Catastrophe may have been averted. But when economists proclaim a recession over, they’re celebrating a technicality: they mean economic output has stopped contracting.
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Worse, the data point that means the most to our psychological well-being—unemployment—is likely to keep climbing. The loss of 6.5 million jobs since December 2007 has spurred the sharpest rise in the unemployment rate since the 1930s. As manufacturing jobs move overseas and companies struggle to further reduce costs, unemployment—which stands at 9.5 percent—is likely to rise above 10 percent. “There’s a difference between having an expansion and an economy that has recovered,” says Lawrence Summers, Obama’s chief economic adviser.

Having survived a near-death economic experience, Americans now need to focus on surviving what’s likely to be a pokey, painful recovery. “I see 1 percent growth in the economy in the next few years,” says New York University economist Nouriel Roubini.