The sweet sleepy warmth of summer nights, when we were gazing at the distant lights, has come to an end. And, although Chad and Jeremy may be a thing of the past, this summer we also found out that all bad things must come to an end. Okay, the lyrics of the old song say “all good things must end”, but we are talking about the recession here, and the data are telling us it is just about over.   
  Has the recession finally ended? It doesn’t matter. Whatever date the Business Cycle Dating Committee chooses for the end of the downturn is important only to those of us who count the number of months in a recession. For those who live in the real world, the recession essentially is over. Even the Federal Reserve seems to believe that is the case.  Although no central banker actually has come out proclaiming the recession has faded away, what they have written seems to point that way.
  The recently released Federal Reserve beige book, a periodic review of the nation’s economy, made it clear that the bottom has been reached. Eleven of the twelve Districts reported that growth had either stabilized or began improving. As expected, the situation was not universally solid. While housing seemed to be coming back, the labor market remained in tough shape. Consumer spending was not great, but manufacturing was picking up. In other words, we are at a turning point.
  The problem with turning points is that we need something to power the upturn. The government is doing all it can, although I am still looking for most of those “shovel ready” projects. They have been funded, but somehow the ribbon cuttings have been few and far between. When construction finally does start to ramp up, growth should improve. 
  While stimulus money can light the fire, it cannot keep it going. The consumer is the key and households have yet to enlist in the army of the recovery. Confidence is not nearly as strong as would be expected given all the stories about the end of the recession. Instead, uncertainty and caution are still the operative words and that is keeping spending down. 
  Should we even expect households to do the heavy lifting required in the early stages of a recovery given the state of the labor market? Yes. Okay, the unemployment rate did jump to 9.7% in August and we lost another 216,000 jobs. Nevertheless, the payroll cuts are slowing and the slow but steady reduction in unemployment claims hints that the rise in the unemployment rate may not have that many more months to run.
  But the most important reason I believe consumers can lead the way is that so many working people are still spending as if they are worried they will lose their jobs.  Everyone seems to have adopted the attitude that you have to show them conditions are better before they will believe it. With the stock market coming back nicely, and home prices turning upward, there really is reason to think the worst is behind us. If only Tinker Bell were around so we can get everyone to believe. When households finally start opening their wallets, businesses will have to replenish their stocks and the recovery will become broad based. That day may not be that far away.
 
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  Joel L. Naroff, Ph.D., is Chief Economist for TD Bank, America’s Most Convenient Bank®. Following TD Bank Financial Group’s acquisition of Commerce Bancorp Inc. on March 31, 2008, TD Banknorth and Commerce Bank merged on May 31, 2008, to become TD Bank, America’s Most Convenient Bank. Today, TD Banknorth and TD Bank form one of the 15 largest commercial banks in the United States with $134 billion in assets, and provide customers with a full range of financial products and services at more than 1,000 convenient locations from Maine to Florida.  TD Bank, N.A. is headquartered in Cherry Hill, NJ and Portland, ME. TD Banknorth and TD Bank are trade names of TD Bank, N.A. For more information visit www.TDBanknorth.com and www.TDBank.com.
  TD Banknorth and TD Bank, America’s Most Convenient Bank, are members of TD Bank Financial Group of Toronto, Canada, a top 10 financial services company in North America, and one of just three triple-AAA-rated banks on the New York Stock Exchange.