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What is the definition of an economic recovery? This is the hot finance topic of the week. As the White House unrolls a PR plan to try and demonstrate that the recession is over thanks to the administration’s efforts, the question of how to exactly define economic recovery is causing confusion. Let’s look at the facts and try to determine an economic recovery definition.

President Obama has claimed that 650,000 jobs have been created or saved through his stimulus plan. The Dow increased by 200 in response to the good news. Plus, the economy grew last quarter for the first time in a year at a rate of 3.5%. Modest, but good. There is also the increase in home sales reported in September. And even Ford posted a profit of nearly $1 billion this year, which came as a surprise to the business community. But do these positive reports illustrate that our economy is set for permanent stability?

Some say no. Increases in car and home sales have been spurred by federally-backed incentives like the $8,000 first time homebuyer tax credit and the cash for clunkers program. These increases don’t stand on their own as signs of consumer strength. So what can we use to define economic recovery?

Writers at the Wall Street Journal believe the jobless rate is a much more meaningful benchmark. But right now it is too soon to tell exactly where that rate is heading based on the statistics available now. So even the jobless rate cannot help us develop a reliable economic recovery definition until we have more information.

Let’s try looking to the president for his definition. The POTUS has declared: “The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we are creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well.” (CBS News)

As unemployment remains high and it is still difficult for people to get loans, we are clearly far from a lasting economic recovery — by the definition of the president himself. But as we have faced the worst economic decline since the Great Depression, it is silly to expect our economy to fully recover after a few months of federal intervention. Obama’s stimulus plan may not have created a full economic recovery within months, but it has helped many families survive what could have been a much worse financial scenario. It has also supported state governments that provide social services like police and teachers to all.

This type of relief may not fit an expert’s economic recovery definition, but it has helped society overall in the short term. For that alone the president can be commended.

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