NBER Announces Recession

The National Bureau of Economic Research (NBER) has announced that December of 2007 has the peak of economic activity. This confirms what many already felt. I recall talking with my Brother-in-law in just prior to New Years Eve in December of 2007 about this. I told him that despite the fact that it had not been announced that we were in a recession, we were in a recession.

Calculated Risk has been using December 2007 as the beginning of the recession for some time now in his research.

From NBER: Determination of the December 2007 Peak in Economic Activity

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.

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.
...

The committee determined that the decline in economic activity in 2008 met the standard for a recession, as set forth in the second paragraph of this document. All evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP, consumption, have declined sharply in recent months.

So there it is. We have been in recession for one year now. The only question remaining now is how long will it take for the contraction to end.

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