Ben S. Bernanke, who is the chairman of the Federal Reserve, has good news for all of us. According to Bernanke, it is “very likely” that our recession is over. Still, he cautions that it may be several more months before we start to see a significant drop in unemployment rates.

“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was,” Bernanke said in a speech he gave at the Brookings Institution. “That’s a challenge for us and all policy makers going forward.”

The National Bureau of Economic Research maintains information regarding business cycles and regularly spends several months sorting through economic trends before it officially declares the start and end dates of a recession. In fact, the most recent recession was in place for 12 months before the National Bureau of Economic Research officially listed the start date as December 2008. Therefore, it will be some time before an official end date is determined. Still, Bernanke’s assertion does give some reason for hope that we are finally turning a major corner.

Prior to Bernanke’s speech, the Commerce Department had already reported that retail sales saw a surge during the month of August. This was largely due to the “cash-for-clunkers” program, which resulted in an increase that surprised the expectations of analysts. Bernanke has reported that economic forecasters are predicting a moderate amount of economic growth over the remainder of this year as well as next year. As the credit markets thaw and as federal monies continue to stimulate the economy through spending and lending programs, economic forecasters predict that consumer confidence will start to return.

“The general view of forecasters is that growth in 2010 will be moderate, less than you might expect given the depth of the recession,” reported Bernanke.

Of course, there is more to consider than whether or not we have officially reached the end of the recession. In fact, policy makers in Washington are now trying to determine when they should start pulling back on the numerous programs and lending initiatives that have been created over the past several months. According to Bernanke as well as Timothy F. Geithner, who is the Treasury secretary, removing the programs too early could lead to additional problems in a way similar to what occurred during the Great Depression. At the same time, waiting too long to remove the programs could lead to price increases as well as inflation.

Of course, putting an end to the programs may also lead to an increase in the cost of borrowing. This, too, could lead to problems with the market while also increasing the borrowing costs of the federal government.
Although there are still many questions left to be answered regarding how to wrap things up and get our economy back on track again, Bernanke is adamant that the steps the government has already taken were both necessary and effective.

“Without these speedy and forceful actions, last October’s panic would likely have continued to intensify, more major financial firms would have failed, and the entire global financial system would have been at serious risk,” said Bernanke. “We cannot know for sure what the economic effects of these events would have been, but what we know about the effects of financial crises suggests that the resulting global downturn could have been extraordinarily deep and protracted.”