NBER: Still not ready to call the recession

Robert Hall, the head of the NBER Business Cycle Dating Committee, the quasi-official arbiter of calling the beginning and ending dates of recessions, said today that it is still not clear that a recession has begun. His comments were reported in a Bloomberg article by Steve Matthews and Thomas R. Keene entitled "NBER's Hall Says Recession Call Tough Amid 'Perplexing' Data" and a Reuters article by Emily Kaiser entitled "Panel not likely to call a recession soon." Some of his comments:

• not ready to declare that one has begun
• probably won't decide until well after the November presidential election
• "We have been subjected to political pressure, which I'm not going to talk about... This has been an issue but we've stood tall on that."
• the committee had "not entered the territory of even tentatively considering" pinpointing the end of the economic expansion
• industrial production was less important now than it was in the 1970s or 1980s, when the U.S. economy was far more reliant on manufacturing. Now, the committee focuses primarily on monthly GDP and employment, and those are giving conflicting signals, much like they did in 2001.
• Hall said he personally thought the U.S. economy was probably in a recession, but quickly added: "That's not official. I'm saying it very quietly."
• "We've had this perplexing period of rising output and declining employment" since the end of last year
• "We're struggling with some interesting questions about the difference between the indicators... We see output or real GDP growing at the same time that employment has been declining and we're trying to make sense out of that."

So, there you have it, straight from the horse's mouth... the U.S. economy is probably in a recession, but relative strength in GDP means it is still too early to call it.

-- Jack Krupansky