WASHINGTON — From household wealth to spending at stores, many of the U.S. economy's vital signs have recovered from the damage done by the Great Recession.
Home foreclosures and layoffs have dropped to pre-recession levels. Economic output has rebounded. And the Dow Jones industrial average is in record territory.
So is the economy back to full health? Not quite.
Not with unemployment at 7.7 percent and with 3 million fewer jobs than when the recession began. And while the housing market is improving, that engine of economic growth and job creation still has far to go before it can be declared healthy.
Perhaps the best way to think about the U.S. economy is this: After five painful years, it's nearly back to where it started when the recession began. What's different now is that the trends are much healthier. Gone are the fears that the economy could fall into another recession.
"We've made a lot of progress," says Michael Gapen, senior U.S. economist at Barclays Capital.
The recession officially began in December 2007. It ended in June 2009.
Here's a look at ways in which the economy has returned to pre-recession levels and ways it hasn't:
HOUSEHOLD WEALTH: Americans lost $16 trillion in wealth during the recession, mainly because home values and stock prices sank. Those losses have now been reversed. Household "net worth" reached $66.1 trillion in the final three months of 2012, according to the Federal Reserve. That was just 2 percent below the peak reached in the fall of 2007. And steady increases in stock prices and home values so far this year have allowed Americans as a whole to regain all their lost wealth, though many individual families have yet to recover. Increased net worth is vital to the economy because it typically drives more spending. Net worth equals the value of homes, investments, bank accounts and other assets, minus debts such as mortgages, student loans and credit card balances.
RETAIL SALES: Just as household wealth has recovered, so has consumers' willingness to spend more to shop, eat out or go on vacation. That trend has spurred job growth at retailers and restaurants. Retail sales totaled $421.4 billion in February. Adjusted for inflation, that was nearly 18 percent above the recession low and just 0.7 percent below the record level in November 2007.
LAYOFFS: The job market remains weak by some measures. But consider this: If you have a job, you're less likely to lose it than at any other point in at least 12 years. That marks a sharp turnaround from the depths of the recession, when layoffs soared — from 1.8 million in December 2007 to 2.6 million in January 2009. In January this year, employers cut 1.5 million jobs — the lowest monthly total in the 12 years the government has tracked such data. That explains why the number of people seeking first-time unemployment benefits each week has plummeted. That number reached 667,000 one week in March 2009, the most in nearly 25 years. Over the past month, weekly applications have averaged 354,000, only slightly more than in December 2007.
FORECLOSURES: Among the most visible signs of the recession were the "Foreclosure" and "Bank Owned" signs that dotted housing developments around the country. But home prices have been rising steadily. Foreclosures have sunk back to pre-recession levels. Banks repossessed 45,000 homes in February 2013, according to RealtyTrac, a foreclosure listing firm. That was the fewest since September 2007 and was down from a peak of 102,000 in March 2010.
STOCK MARKET: Last month, the stock market finally regained the painful losses investors suffered during the recession. The Dow Jones industrial average closed at an all-time high of 14,253.77 on March 6. That topped its previous peak of 14,164.53 in October 2007. The Dow had plunged all the way to 6,547.05 in March 2009. It closed even higher on Tuesday at 14,662. 01. And the Standard & Poor's 500 stock index, a broader measure of the market, reached a record 1,570.25.