I’ve been looking all over the web for the actual technical document that was published today that declared the recession start as December 2007. Personally, I found the news reports on this terribly lacking – it’s really quite confusing how the recession could start before two sequential quarters of GDP growth.
The full PDF is here. The synopsis:
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.
It looks like the discrepency is based on some of the differences in measurement for GDI (Gross Domestic Income) and GDP (Gross Domestic Product), which should be equal, but due to measurement issues, often are not. Predominantly, it looks like employment peaked in December 2007, making everything afterward post-inflection.
My personal opinion is that too much was made of this today in terms of the stock market – a lot of trading these days seems to hinge on which historical analogy happens to be in vogue that day. Today, the meme was “long recession”, with the December 2007 technicality confirming that we’ve “already had a recession of 12 months!” which is historically long for a recession.
Anyway, I’m sure readers out there with an economics background will appreciate the actual report, versus the drivel in the popular media.