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NBER: Recession ended in June 2009

oldreliable67

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The NBER business cycle dating committee has determined that the recession ended in June 2009...

CAMBRIDGE September 20, 2010—The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18
months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that
month. 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.

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date.
The full memo can be read here.
 

Kushinator

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Does this mean a "double dip" is now impossible?
 

phattonez

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In how many years will this be corrected like it was for the early 2000s recession? 3 years? 4?
 
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PeteEU

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In how many years will this be corrected like it was for the late 2000s recession? 3 years? 4?
When the Republicans take over power and start to rewrite history as they usually do.
 

oldreliable67

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In how many years will this be corrected like it was for the early 2000s recession? 3 years? 4?
As you know, the various gov't agencies that collect econ data often revise that data. Fortunately, most revisions occur within 3 months of the original report. Unfortunately for economic historians, the NBER, and the Conference Board, there are several major econ time series that are revised annually. These so-called 'benchmark' revisions result from the inclusion of more all-encompassing 'harder' data than available during the intervening months, when surveys are the predominant source of data. For example, manufacturing, employment and income get annual benchmark revisions with the inclusion of data from the IRS. The employment data has historically been the econ series with the most significant benchmark revisions; it is also one of the most important in the consideration of dating recessions.

IIRC, and I'm a bit embarassed to admit that I'm a little vague on this (so if anyone remembers differently or wants to google it up, please do so!), the 2000 recesssion was particularly contentious with regards to dating, particularly because employment growth lagged significantly. This is what the dating committee had to say about it:

July 17, 2003

CAMBRIDGE July 17 -- The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in November 2001. The trough marks the end of the recession that began in March 2001 and the beginning of an expansion. The recession lasted 8 months, which is slightly less than average for recessions since World War II.

In determining that a trough occurred in November 2001, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. 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.

The committee waited to make the determination of the trough date until it was confident that any future downturn in the economy would be considered a new recession and not a continuation of the recession that began in March 2001. The committee noted that the most recent data indicate that the broadest measure of economic activity-gross domestic product in constant dollars-has risen 4.0 percent from its low in the third quarter of 2001, and is 3.3 percent above its pre-recession peak in the fourth quarter of 2000. Two other indicators of economic activity that play an important role in the committee's decisions-personal income excluding transfer payments and the volume of sales of the manufacturing and wholesale-retail sectors, both in real terms-have also surpassed their pre-recession peaks. Two other indicators the committee focuses on-payroll employment and industrial production-remain well below their pre-recession peaks. Indeed, the most recent data indicate that employment has not begun to recover at all. The committee determined, however, that the fact that the broadest, most comprehensive measure of economic activity is well above its pre-recession levels implied that any subsequent downturn in the economy would be a separate recession.
The entire memo is here.
 

Civil1z@tion

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Of course the recession ended months ago, the timeline of a recession has nothing to do with unemployment figures so yes the recession has been over for some time. The issue is that while unemployment is a lagging indicator, it is lagging more than normal. Thus there is a perception of continued recession, though that perception will not technically be reality unless a double dip happens.
 
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