The NBER Announces the End Date of the Recession

Tue, 21 Sep 2010 11:55:57 +0000

Now having had a chance to study the revised data on Gross Domestic Product and Gross Domestic Income, the NBER Business Cycle Dating Committee has determined that the recession that began in December 2007 ended in June 2009.  What is salient about the determination is the assertion that the intervening period has been an expansion, however weak, and that any new downturn would be a new recession.  I don't know how that will be spun by the political talking heads -- perhaps that any new recession is "Obama's recession."

The explanation is a carefully written statement, with important caveats, among them:

A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

[...]

[I]n previous business cycles, aggregate hours and employment have frequently reached their troughs later than the NBER’s trough date. In particular, in 2001-03, the trough in payroll employment occurred 21 months after the NBER trough date. In 2009, the NBER trough date is 6 months before the trough in payroll employment. In both the 2001-03 and 2009 cycles, household employment also reached its trough later than the NBER trough date.

The whole statement is worth a read.