Recession isn’t necessarily over

WASHINGTON
— A panel of academics that date the beginnings and ends of recessions isn’t
ready to declare just yet when this downturn ended.

The
National Bureau of Economic Research said today that although most barometers
show improvements in the economy, it would be “premature” to pinpoint the end
of a recession based on economic data seen so far.

That
assessment came after the group of academic economists met at its Cambridge,
Mass., headquarters on Thursday to review mountains of economic data.

The
panel looks at figures that make up the nation’s gross domestic product, which
measures the total value of goods and services produced within the United
States. It also reviews incomes, employment and industrial activity.

The
economists decided that many of the key economic indicators are “quite
preliminary at this time and will be revised in coming months,” NBER said. The
government often changes its estimates of economic growth, job creation and
other important barometers based on more complete information. The panel of
academic economists was wary of making a declaration about the end of the
recession when key government figures could still be changed.

NBER
has already pinpointed the start date of the recession as December 2007. Many
private economists believed the recession ended in June or July last year.

The
economy started growing again in the second quarter of last year after a record
four straight quarters of declines. The economy also has started to generate
jobs again — albeit at a sluggish pace.

The
NBER normally takes its time in declaring a recession has started or begun.

The
NBER announced, for example, in December 2008 that the recession had actually
started one year earlier — in December 2007.

Similarly,
it declared in July 2003 that the 2001 recession was over. When did it actually
end? Twenty months earlier — in November 2001.

Its
determination is of interest to economic historians — and political leaders.
Recessions that occur on their watch pose political risks.

In
President George W. Bush’s eight years in office, the United States fell into
two recessions. The first started in March 2001 and ended that November. The
second started in December 2007; its end date is pending the NBER’s determination.

The
timing of the NBER’s decision likely means little to ordinary Americans now in
the grip of a moderate economic recovery and weak jobs market.

Many will continue to
struggle. Unemployment usually keeps rising well after a recession ends. After
the 2001 recession, for instance, unemployment didn’t peak until June 2003 — 19
months later.

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