Who Determines When a Recession Begins and Ends? An organization called the National Bureau of Economic Research ( NBER) is responsible for determining when recessions begin and end in the US.
The NBER defines recessions as significant declines in economic activity that last from a few months to more than one year. They don't only look at GDP, but also gross domestic income (GDI). In addition, they use some economic data that are reported monthly as opposed to quarterly. This includes industrial production, employment, and retail sales.
The NBER does not give exact dates, but they do say in which month of the year the recession began and ended. For example, the Great Recession of 2007-2009 began in December 2017 and ended in June 2009. The US economy has been in expansion since then. It is now the longest expansion in modern history.
Because a recession influences the economy broadly and is not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The traditional role of the committee is to maintain a monthly chronology, so the committee refers almost exclusively to monthly indicators.
The NBER's Business Cycle Dating Committee maintains a chronology of US business cycles. The chronology identifies the dates of peaks and troughs that frame economic recessions and expansions.
As identified by the NBER The NBER defines a recession as a period between a peak and a trough in the business cycle where there is a significant decline in economic activity spread across the economy that can last from a few months to more than a year.
Recessions start at the peak of the business cycle—when an expansion ends—and end at the trough of the business cycle, when the next expansion begins.
An economic cycle is the overall state of the economy as it goes through four stages in a cyclical pattern. The four stages of the cycle are expansion, peak, contraction, and trough. Factors such as GDP, interest rates, total employment, and consumer spending, can help determine the current stage of the economic cycle.
Official Recession Definition In 1974, economist Julius Shiskin came up with a few rules of thumb to define a recession: The most popular was two consecutive quarters of declining GDP.
the NBEROfficial business cycle dates—the peaks and troughs in the economy that define recessions and expansions—in the U.S. are determined by the NBER. A private, nonprofit, nonpartisan research organization founded in 1920, the NBER is dedicated to understanding how the economy works.
Contraction is the phase that can lead country economy into recession. Contraction phase is a term that is describing an economic phase, phase of a business cycle, when real GDP is falling.
December 2007Great Recession / Start date
Recessions can be caused by an overheated economy, in which demand outstrips supply, expanding past full employment and the maximum capacity of the nation's resources. Overheating can be sustained temporarily, but eventually spending will fall in order for supply to catch up to demand.
Economic recovery is the business cycle stage following a recession that is characterized by a sustained period of improving business activity. Normally, during an economic recovery, gross domestic product (GDP) grows, incomes rise, and unemployment falls as the economy rebounds.
A recession is a period of declining economic performance across an entire economy that lasts for several months. Businesses, investors, and government officials track various economic indicators that can help predict or confirm the onset of recessions, but they're officially declared by the NBER.
The National Bureau of Economic Research (NBER) is a private, nonpartisan organization that facilitates cutting-edge investigation and analysis of major economic issues.
economy slumped into a recession that lasted from March 2001 until November 2001. This recession ended a ten-year period of expansion in the national economy, the longest expansion in U.S. history according to the National Bureau ...
A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in ...
A private, nonprofit, nonpartisan research organization founded in 1920, the NBER is dedicated to understanding how the economy works. Today it has over 600 university professors and researchers who conduct empirical research on the economy as Bureau associates. Business Cycles.
The gray bars represent periods of recession defined by the NBER—payroll employment growth is typically negative during recessions.
The broadest monthly indicator is employment in the entire economy . The committee generally also studies another monthly indicator of economy-wide activity, personal income less transfer payments, in real terms, adjusted for price changes. In addition, the committee refers to two indicators with coverage of manufacturing and goods: (1) the volume of sales of the manufacturing and trade sectors stated in real terms, adjusted for price changes, and (2) industrial production.
A popular rule of thumb is that two consecutive quarterly declines in real GDP signal a recession. This rule is consistent with the dispersion and duration requirements for a recession and with the average recessionary path of real GDP; however, two very small quarterly declines might not produce the depth required for a recession. Indeed, in dating business cycles, the NBER does not use this rule or focus on movements in quarterly real GDP.