NBER Business Cycle Dating Committee Announces Trough Date

Source: National Bureau of Economic Research

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 committee waited to make its decision until revisions in the National Income and Product Accounts, released on July 30 and August 27, 2010, clarified the 2009 time path of the two broadest measures of economic activity, real Gross Domestic Product (real GDP) and real Gross Domestic Income (real GDI). The committee noted that in the most recent data, for the second quarter of 2010, the average of real GDP and real GDI was 3.1 percent above its low in the second quarter of 2009 but remained 1.3 percent below the previous peak which was reached in the fourth quarter of 2007.


Read more: http://www.nber.org/

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NOTE that the "end of a recession", to an economist, does not mean that everything is roses, or that we're back to where it was at the top -- hardly -- it merely means that things are getting better rather than worse. from an overall economic point of view, i have to agree. we're STILL not in a happy place, but we're in a better place than where we were in mid 2009. if you recall, there was rather more panic and fear of skies falling back then.

this should be a more permanent link: http://www.nber.org/cycles/sept2010.html

... that makes the NBER the only determiner of when a recession begins or ends, or when a recovery begins or ends.

My measurements show that the contraction continues -- so there.

sure, we're plenty worse off than we were in January 2008. the pain of a contraction is felt long after it ends.

a contraction is the period from peak to trough.
an expansion is the period from trough to peak.

most people don't feel we've "recovered", however, until we've gone from peak to trough and back to the level of the previous peak, something that in this case will take several more years. but economists don't have a term for that.

and the fattest pigs continued to gorge