Recession unofficially ends as economy grows 3.5 percent. The U.S. economy grew in the third quarter for the first time in a year, beating market expectations, as consumer spending and new home-building rebounded, signaling the end of the worst recession in 70 years.

While the stock market and the mainstream economists are busy celebrating the end of the recession, it is probably wise to contemplate the reliability of these GDP Advance reports before joining in the party. Less than a year ago, the Q4 2008 Advance reported -3.8 percent growth, which was revised downward to -6.2 percent growth in the subsequent preliminary report. See GDP Variations 2007-2009 for a graphical demonstration of the reliability of GDP reporting. While there are some genuinely positive signs to be found in the BEA’s statistical summary, it’s important to note that 47 percent of this reported “growth” was in motor vehicle output, which was nothing more than the result of the government-subsidized expansion of private debt known as the Cash for Clunkers program.

The reality is that the recession is not over in either official or unofficial terms. Five factors that can be utilized to determine if the depression is over are as follows: