It was only a year ago when the world entered the recession, it was only a year ago since the prospect of a second great depression was on the table; has it all blown over? Markets have recovered most of their value, the US manufacturing sector has had its first recorded growth in 18 months, automakers such as Ford, Toyota and Honda have recorded a jump in sales, and banks like Goldman Sachs have paid of most of their bailout money and recorded a profit.

The government is staying silent about the topic, but the majority of top economists believe the recession is over, or will end early 2010.

People like David Kelly, chief market strategist at JPMorgan Funds, say that “A recession is measured as the period of time between the best month and the worst month. Although it still feels lousy … I think we are past the worst month. From that perspective, I think the recession is over, and the recovery has begun.”

Doesn’t sound promising, does it? But a recession isn’t just a period of bad times. Technically, David Kelly is probably right, the worst month is probably behind us, and recovery has already started. Markets are up and so is revenue for most companies, even if unemployment is rising. It is also good to note that unemployment usually lags behind a recession and recovers much later than the economy.

Don’t trust David? Here are some more notable Economists and their views.

Bob Doll vice chairman and global chief investment officer of equities at BlackRock: “I think it’s ending as we speak. My guess is that the National Bureau of Economic Research … will look back after the turn of the year and will point to some month … and say that was the end of the recession. Whether it’s August or September, who knows, but it’s happening.”

John Linehan, co-director of T. Rowe Price’s U.S. equity division and portfolio manager of the T. Rowe Price Value Fund : “Recession is a technical term. I don’t think things are getting worse. I think things are starting to get better.”

Uri Landesman, head of global growth at ING Investment Management: “I do think the recession is over. Now, that doesn’t mean we’re only going to have great news on the economic front. But I believe the economy is going to expand (albeit) at a reasonably gradual rate until lending increases”

If some people are still skeptical, here is some more proof; The Dow Jones Industrial Average, which is a composite index of 30 stocks which are the largest, and most widely publicly held in the US, bottomed on March 9, 2009, and has been rising ever since. The S&P 500, which is similar to the Dow Jones, but is a composite of 500 stocks, also bottomed on March 9, and has been rising since.

AIG, the troubled insurance giant, who has been taken over by the government under the emergency tarp funds, owes $182.88B to various groups, $85 Billion of which is owed to the government, but it recorded its first profit since 2007 this in June. Goldman Sachs, which is arguably the smartest but undoubtedly the most successful bank of the recession is generating record profits and has paid the majority of its bailout money.

Most economists agree that Q3 2009 was the end of the recession, and that ended around September 30. So we will have to wait and see what companies’ earnings are, and how they have lived through the recession.

Another factor that affects the economy is lending by banks and the federal cash interest rate. The government interest rate is low currently, but banks are hesitant to lend in large quantities, slowing the growth and operations of borrowing companies. Even if the economy is recovering, it will be slow and painful, and we cannot be happy until the leading market loosens.

Credit: Canglecartoons.com

But just because the recession is over, doesn’t mean everything is OK. Provincial and State budget woes will continue for a couple more years, rising unemployment and a decline in consumer spending have put a dent in tax revenues. The current state of the US budget cannot withstand this and the government will be forced to cut costs, but from where?

Historically speaking, it takes governments 2 to 5 years to return to regular tax revenue levels, so we could be looking at hard times for the government in next few years.

Cost cuts will be difficult in this time. With a humongous deficit over our heads, the thought of even more spending makes many citizens uneasy, but this is the only way we can get out of this recession.

Whatever happens, our woes are not yet over. We could be in for 2 more years of hardship, even if the “recession” is over.