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| | | | (CEP News) - The U.S. economy has been in recession since December 2007, the National Bureau of Economic Research announced on Monday.
The result comes despite the economy not having suffered the two consecutive quarters of negative growth usually needed to characterize an economy as recessionary. The only negative reads on GDP in the US were in Q4 2007, when the economy fell 0.2%, while in Q3 2008 preliminary estimates suggest a 0.5% contraction.
"Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity," explained the report.
"The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment. This series reached a peak in December 2007 and has declined every month since then."
The NBER maintains that the discrepancy between GDP growth and a decline in U.S. employment is a due to a statistical discrepancy and that after December 2007, the declines justify the definition of a recession.
On the basis of real personal incomes excluding transfers, the report also suggests a peaking economy in December 2007, while retail manufacturing and wholesale trade suggested a peak in June 2008. The NBER furthermore states that since January 2008, industrial production has fallen 4.8%.
And indeed, conditions are not expected to improve any time soon with the Bureau of Labour Statistics expected to report a 325k decline in nonfarm payrolls and a 0.3% gain in the unemployment rate to 6.8% for November. The U.S. nonfarm payrolls report will be released on Dec. 5. |
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| | | | Not that it is the biggest issue, but it is now clear that ML was right all along and those that called him an outright liar (and in some cases much worse) for claiming earlier this year that we were already in a recession were....liars?
Where are those apologies for ML and an aknowldgement of his prescient powers now?
It's official: U.S. is in recession
Economy began shrinking in December 2007, panel declares
updated less than 1 minute ago
WASHINGTON - The economy fell into recession late last year, according to a panel of economists that is responsible for determining the dates of business cycles.
Monday's declaration by the panel of the National Bureau of Economic Research confirms what many private economists, lawmakers and members of the general public already have assumed and puts an official date on it: A U.S. recession began in December 2007.
That was the same month employment peaked, and the economy began shrikning in a downturn that has been exacerbated by the financial crisis that took hold of markets beginning in September.
The White House commented on the news without ever actually using the word “recession,” a term President George W. Bush and his aides have repeatedly avoided.
Instead, spokesman Tony Fratto remarked upon the fact that the NBER “determines the start and end dates of business cycles.”
“What’s important is what is being done about it,” Fratto said. “The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus.”
The NBER's seven-member Business Cylce Dating Committee met Friday and determined that economic activity peaked last December and has essentially been declining since then.
Payroll employment peaked that month and has declined every month since then, with the economy shedding some 1.2 million jobs, the committee noted in a statment on the NBER Web site.
The committee's determination puts an end to an expansion that began in late 2001 and lasted 73 months. The previous expansion in the 1990s lasted 10 years, or 120 months.
A common definition of a recession is a period when the nation's gross domestic product shrinks for two consecutive quarters, but the committee noted that GDP figures have been erratic this time around. GDP fell in the final quarter of 2007 but then rose in the first half of 2008 before falling again in the third quarter of this year.
Nevertheless the committee found that other key figures -- including personal income, industrial production and wholesale sales -- all peaked between November 2007 and June 2008.
The committee defines a recession as "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."
The Associated Press contributed to this story. |
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| | | | Thanks WilliamRobert
I told them so 
~ I dig it when you have a smile on your face ~  |
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