NBER: The Recession Is Over

The National Bureau of Economic Research issued a statement today stating that the recession  began in December 2007 and ended in June 2009.


The NBER met by phone on Sunday and in their statement following the conference call said:

 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.

Given the current state of the economy, the NBER is going to take a lot of flack for making this announcement. There was huge money printing between September 2008 and early 2009, which did, indeed, reverse the then downtrending economy, or at least the Wall Street end of things--the stock market rally followed that point.

But to identify the recession as over because of this blip up in the numbers is certainly out of touch with what the average person is experiencing right now. It is, in other words, a further indictment of the mass aggregated macro-numbers that are used to follow the economy by the worlds econometricians.

That said, even with this hyper-technical calling of the end of the recession,  the 2007-2009 recession is the longest in the post-WWII period. It also means that when the numbers turn down again, as they appear very likely to do, it will technically be the start of a new recession.

The current members of the Business Cycle Dating Committee are: Robert Hall, Stanford University (chair); Martin Feldstein, Harvard University; Jeffrey Frankel, Harvard University; Robert Gordon, Northwestern University; James Poterba, MIT and NBER President; James Stock, Harvard University; and Mark Watson, Princeton University