Yesterday’s ABA’s (American Bankers Association) Economic Perspective post said that the “National Bureau of Economic Research (NBER), the organization in change of officially declaring peaks and troughs in the business cycle, made the official declaration that the economic contraction that began in December 2007 came to an end in June 2009.” It goes on to state that “the recession lasted 18 months, making it the longest of any post WWII recession. The longest prior recessions lasted 16 months, which were those of 1973-75 and 1981-82.”
In presenting its methodology, it states that “the NBER looks at numerous economic indicators when making its decision, including GDP, employment, personal consumption and income growth. In making its declaration, the NBER was careful not to state that the economy is operating at normal capacity or that it is back to health, but rather that the decline ended in June 2009. The NBER stated:
In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.
The committee further stated that if a “double dip” were still to occur, that it would be deemed a separate recession:
The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date.”
So this recession is over and anymore downturn means a new recession???? Really?
Does anyone else feel like for the last two years what you thought was up was really down and what you thought was down was really up? That is my personal new normal and I am getting used to it. So when I am being told that the recession is over, I just chalk it up to just another day in this alternate dimension which consists more often of extraneous “noise” and “stuff.” I suspect I am no different from most average Americans – our skeptic skills have become finely tuned.