NBER Calls the Official Recession Dates Crossing Wall Street

NBER Calls the Official Recession Dates

The National Bureau of Economic Research is widely considered to the be the official standard for dating economic recessions.

They just called the most recent recession. The peak was in February 2020 and the trough was in April 2020. This was the fastest recession on record.

The Business Cycle Dating Committee of the National Bureau of Economic Research maintains a chronology of the peaks and troughs of US business cycles. The committee has determined that a trough in monthly economic activity occurred in the US economy in April 2020. The previous peak in economic activity occurred in February 2020. The recession lasted two months, which makes it the shortest US recession on record.

The NBER chronology does not identify the precise moment that the economy entered a recession or expansion. In the NBER’s convention for measuring the duration of a recession, the first month of the recession is the month following the peak and the last month is the month of the trough. Because the most recent trough was in April 2020, the last month of the recession was April 2020, and May 2020 was the first month of the subsequent expansion.

You’ll often hear that a recession is two or more quarters of negative economic growth. That’s not exactly right. From their website:

In determining the dates of business cycle turning points, the committee follows standard procedures to assure continuity in the chronology. Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. It views real gross domestic product (GDP) as the single best measure of aggregate economic activity. This concept is measured two ways by the US Bureau of Economic Analysis (BEA)—from the expenditure side and from the income side. Because the two measures have strengths and weaknesses and differ by a statistical discrepancy, the committee considers real GDP and real gross domestic income (GDI) on an equal footing. It also places considerable weight on total payroll employment as measured by the Bureau of Labor Statistics (BLS).

Posted by Eddy Elfenbein on July 19th, 2021 at 2:44 pm

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