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Tilting at Windmills

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December 1, 2008

AN OFFICIAL RECESSION.... The announcement was only a matter of time.

The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy.

The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.

"The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment," said the group's statement. "This series reached a peak in December 2007 and has declined every month since then." [...]

The NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said. In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.

This is the eleventh recession in the post-World War II era, but it is already one of the longest. The NBER announcement shows that our current downturn has lasted a year (and counting), and only two of the modern recessions (November 1973 to March 1975 and July 1981 to November 1982) have lasted this long.

It suggests the current recession is very likely to be the longest since the Great Depression.

We knew all of this, of course, but it's reassuring, I suppose, to get official confirmation.

Steve Benen 1:45 PM Permalink | Trackbacks | Comments (24)

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Comments

reassuring? hardly. stating the obvious? yes.

Posted by: mudwall jackson on December 1, 2008 at 1:46 PM | PERMALINK

No worries. The loyal Bushies will rewrite this fact of history as well.

Posted by: Chopin on December 1, 2008 at 1:48 PM | PERMALINK

It didn't take nearly this long to diagnose the recession in 2001. And that was a lot milder than this one. If these are our top economists, well...

Posted by: Danp on December 1, 2008 at 1:56 PM | PERMALINK

Recession is when your neighbor loses his job. Depression is when you lose yours.

Posted by: The Galloping Trollop on December 1, 2008 at 1:57 PM | PERMALINK

It doesn't matter what you call it, people are hurting yadda, yadda, yadda!

The President is a champion for International Peace. He is awesome!

Posted by: TBone on December 1, 2008 at 2:04 PM | PERMALINK

To me, this announcement seems a bit rushed... Maybe the NBER should take another year or two before making the call just to, you know, let the data shake itself out.

Posted by: MarkC on December 1, 2008 at 2:12 PM | PERMALINK

The fundamentals are strong!

Posted by: SBG on December 1, 2008 at 2:15 PM | PERMALINK

If these are our top economists, well...

Human factors researcher has established that economists are less efficient at their jobs during election season ;)

Posted by: Dave Munger on December 1, 2008 at 2:17 PM | PERMALINK

Hasn't Dana Peroxide, along with various other presidential spokesholes, been telling us for a year that we're not "officially" in a recession? As long as it was average Americans losing their jobs and running out of money Bushco's answer was that "the fundamentals of the economy are strong." As soon as Wall Street ran into trouble it was "Give us a bazillion dollars or we're all gonna' die!"

Posted by: Dennis-SGMM on December 1, 2008 at 2:17 PM | PERMALINK

A year after the Democrats take Congress, WHAM! Recession.

Nothing to rewrite. Simply overlook that no significant policy changes occurred in that year and drink the Kool-Aid that Republicans run economies really well if given carte blanche.

Posted by: toowearyforoutrage on December 1, 2008 at 2:19 PM | PERMALINK

Back to December of 2007, eh? But how will the wingnuts continue to claim that this is the "Obama recession"? I know that facts are mere inconveniences to righties, but this should still be a bit difficult to spin.

Posted by: Stacy6 on December 1, 2008 at 2:20 PM | PERMALINK

In related news, NOAA has just confirmed that New Orleans was, indeed, hit by a hurricane in 2005.

-Z

Posted by: Zorro on December 1, 2008 at 2:22 PM | PERMALINK

From the article:

"Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining. That has yet to take place during this recession."

This begs the question, what is a "recession," then?
Is there an "official" definition? Is there an overwhelming consensus among economists?

Posted by: hark on December 1, 2008 at 2:38 PM | PERMALINK

Maybe uber-dufus Phil Gramm will now stop his incessant whining about how we are not in a recession.

Posted by: J Frank Parnell on December 1, 2008 at 2:44 PM | PERMALINK

Nice of them to notice. Too bad they don't see that, in terms of wages and job quality, most Americans never emerged from the 2001 recession. That's what happens when you move all the country's wealth to the top 2%, then do an average.

Posted by: ericfree on December 1, 2008 at 2:45 PM | PERMALINK

Has anyone told George Bush?

Posted by: coral on December 1, 2008 at 3:18 PM | PERMALINK

Time out - NBER did not say when this recession will turn around. They won't announce until months after what they have decided was the turnaround date. OK, something tells me we are not yet in a recovery, but let's be clear that NBER often waits on making these announcements.

Posted by: pgl on December 1, 2008 at 3:22 PM | PERMALINK

"A year after the Democrats take Congress, WHAM! Recession."

A prediction of the next Rush Limbaugh line! Credit to the commenter's next (reasonable) statements - which of course, Rush will not mention!

Posted by: pgl on December 1, 2008 at 3:24 PM | PERMALINK

Finally--let's call a spade a spade.

If I hear: "Economic Downturn" one more time, (and indeed I did over Thanksgiving), I might be violently ill.

This isn't even a classic recession, really. It's got so many depression-laden qualities to it, that I think we need a new term.

Posted by: "Economic Downturn" on December 1, 2008 at 3:32 PM | PERMALINK

Has anyone told George Bush?

Better yet, has anyone told Matthew Marler or John Hansen or rdw or the other geniuses who've trolled this site over the past few years telling us we were experiencing an economic boom?

Posted by: trex on December 1, 2008 at 5:37 PM | PERMALINK
This begs the question, what is a "recession," then?

Whatever the NBER says it is.

Functionally, it seems to be a post-peak activity period lasting at least two quarters without two consecutive quarters of growth. (Once you get the two consecutive of growth, the point from which that growth started is likely to be retroactively seen as the end, the "trough", of the recession.)

Though even that's just a rough rule of thumb, and longer and not much less rough than the usual, and likewise not necessarily true, two-consecutive-quarters-of-negative growth.

Posted by: cmdicely on December 1, 2008 at 6:27 PM | PERMALINK

Can we now all go slap Dr. George F. Will and recite back his "You can't say we are in a Recession because it's not a Recession unless there has been two consecutive quarters of negative growth and you don't know that until after the second quarter!"

So everyone who said we were in a Recession in 2008 was RIGHT and Will was WRONG!

Posted by: Lance on December 1, 2008 at 6:48 PM | PERMALINK

"It suggests the current recession is very likely to be the longest since the Great Depression."

But it won't be called a "Depression" until five years after the fact.

Is all economics this useless?

Posted by: Sidewinder on December 1, 2008 at 10:24 PM | PERMALINK

This article has been featured at THEWEEK.com as Best Opinion - We really enjoyed your opinion on this subject.

Posted by: Harold on December 2, 2008 at 3:25 PM | PERMALINK




 

 

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