The ratio of leading to lagging indicators is a time-honored way of determining whether a recession is at hand or ending. The June data released this morning (see chart) offers strong evidence that the recession is done with. Saying that does not mean a dynamic upturn is at hand or that the labor market is going to improve at the get go. I wrote in a recent post that the time frame for private employment to return to its pre-recession peak has unfortunately extended dramatically beginning with the 1990-91 recession.
The coming recovery will be interesting as public debt & guarantees replaced and backstopped a lot of private capital while the private sector, households in particular, is still too leveraged A recovery that rebalances domestic investment with domestic saving is, however, bad politics because it means low growth (read high unemployment) for an extended period. If the Fed, Treasury, et al, stay with the strong dollar policy in place since Reagan in order to fund the Federal government's turn at running up growth with borrowed money (firms did it with tech spending in the 90s and consumers with home buying in 00's) then we get a faster upturn but it won't last and the downturn to follow will be even uglier.