To: tejek who wrote (128422 ) 12/4/2012 3:14:18 PM From: RetiredNow Read Replies (1) | Respond to I don't think so. When NBER analyzes 2012 to determine if we had a recession, I think there is an better than 80% chance they declare there was one. If we have been in recession in Q3 or Q4, then NBER will make it official sometime in late 2013 or 2014. So we have another year or more to go to see whether we were/are in recession or not. I think, as does ECRI, that we are in one now and have been for a few months. When NBER weighs in on 2012. I will come back to you and RW and say I was right or wrong. If I was right, then I'm going to expect you to acknowledge that, since you and RW have been so vociferous in telling me I was wrong, even though the official body has not weighed in yet. :)nber.org The Committee does not have a fixed definition of economic activity. It examines and compares the behavior of various measures of broad activity: real GDP measured on the product and income sides, economy-wide employment, and real income. The Committee also may consider indicators that do not cover the entire economy, such as real sales and the Federal Reserve's index of industrial production (IP). The Committee's use of these indicators in conjunction with the broad measures recognizes the issue of double-counting of sectors included in both those indicators and the broad measures. Still, a well-defined peak or trough in real sales or IP might help to determine the overall peak or trough dates, particularly if the economy-wide indicators are in conflict or do not have well-defined peaks or troughs.nber.org Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure? A: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. In 2001, for example, the recession did not include two consecutive quarters of decline in real GDP. In the recession beginning in December 2007 and ending in June 2009, real GDP declined in the first, third, and fourth quarters of 2008 and in the first quarter of 2009. The committee places real Gross Domestic Income on an equal footing with real GDP; real GDI declined for six consecutive quarters in the recent recession.Q: Why doesn't the committee accept the two-quarter definition? A: The committee's procedure for identifying turning points differs from the two-quarter rule in a number of ways. First, we do not identify economic activity solely with real GDP and real GDI, but use a range of other indicators as well. Second, we place considerable emphasis on monthly indicators in arriving at a monthly chronology. Third, we consider the depth of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in activity." Fourth, in examining the behavior of domestic production, we consider not only the conventional product-side GDP estimates, but also the conceptually equivalent income-side GDI estimates. The differences between these two sets of estimates were particularly evident in the recessions of 2001 and 2007-2009.Q: Typically, how long after the beginning of a recession does the BCDC declare that a recession has started? After the end of the recession? A: The committee's determination of the peak date in December 2007 occurred 11 months after that date and the committee's action in determining the trough date of June 2009 occurred 15 months after that date. Earlier determinations took between 6 and 21 months. There is no fixed timing rule. The committee waits long enough so that the existence of a peak or trough is not in doubt, and until it can assign an accurate peak or trough date.
