U.S. Officially In Recession Says National Bureau of Economic Research
The NBER met via conference call on Friday, November 28th, and determined that the U.S. economy had peaked in December 2007, and since has been in recession.
The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.
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A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.
While most economists define recession as two consecutive quarters of declining Gross Domestic Product, the NBER’s definition of recession is more loosely based on their own chronological records of production, employment, income and other indicators. They have determined that the U.S. Economy hit a peak in December 2007, and therefore have since been in a recession based on that peak.
What Is The Definition Of A Recession, And Are We In One?
After reading today that the unemployment rate had grown to a 14 year high of 6.5 percent the words “Recession” and “Depression” came to mind. I had a friend tell me recently that his definition of recession and depression was this:
“If you’re losing money consistently on your investments, we are in a recession. If you lose your job, we are in a depression.”
It seems that with the huge surge of foreclosures and the real estate slump, any job in and around construction and home improvement would be in jeopardy already. Throw in a slumping economy where people just don’t buy as much as they used to, and it doesn’t take a genius to figure out that many jobs will be lost.
So to read that the unemployment rate is on the rise caught my attention. Are we heading for a depression? And, if so, are we currently in a recession? This caused me to do a little research to find out if we are in fact in a recession. I read on so many articles that say we are “heading for a recession”. But honestly, it feels like we are already in a recession. So, are we in a recession?