Update: One thing I forgot to talk about is how this announcement will affect the chances that either the Fed or Congress will give the economy more help.I don't think this will have much of an impact on the Fed's decision, they weren't likely to do much more before and, since this call is unlikely to be news to members of the FOMC, it won't have much impact on what they do.It does not say we have recovered, only that we've turned the corner, and it doesn't say anything about how long it will take to reach full employment. An examination of recent data does reveal a "fishhook" shape, though the part of the hook with the barb is pretty short.So it's hard to quarrel with the date they assigned, particularly given how past recessions were dated.But I'm very worried we are going to bounce along the bottom of the valley near the trough for an extended period of time rather than making a strong move back to full employment.If the apparent turnaround stalls, or if we regress a bit, it won't be as certain that the bottom is behind us.Although the NBER does not date recessions before 1857, economists customarily extrapolate dates of U. recessions back to 1790 from business annals based on various contemporary descriptions.Their work is aided by historical patterns, in that recessions often follow external shocks to the economic system such as wars and variations in the weather affecting agriculture, as well as banking crises.
The NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than two quarters which is 6 months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales".Both can argue that although the recovery is slower than we'd hoped and expected, the past stimulus helped us turn the corner and at this point we've done all that we can do. As I've made clear here in past posts, I think that's a mistake, there's still more that can and should be done for labor markets in particular -- I fear stagnation is ahead and we need to take insurance against that outcome now -- but this announcement makes such action less likely.Cycles in the country's agricultural production, industrial production, consumption, business investment, and the health of the banking industry contribute to these declines. The unofficial beginning and ending dates of recessions in the United States have been defined by the National Bureau of Economic Research (NBER), an American private nonprofit research organization.Louis Fed's FRED data and economic research service was no longer indicating a vertical "recession bar" from the period starting around mid-year 2009.Finally, today, curiousity got the best of me and I called my St. This was his response (confirming what I'd already inferred): Apparently the two staff economists that review the FRED charts believe July 2009 is the date they believe the NBER will announce as the end of the recession.
Major modern economic statistics, such as unemployment and GDP, were not compiled on a regular and standardized basis until after World War II.