Recession start month likely to be June, January, or last December

Although the NBER Business Cycle Dating Committee (NBER BCDC), the quasi-official arbiter of dating of recession start and end dates, is still not ready to declare when the recession started, it appears to me that there are three possibilities. First, payroll employment did peak in December 2007. Second, real monthly GDP peaked in June 2008. Third, that June peak was somewhat artificial since it was "spiked" with the tax rebate stimulus checks in April through July, so if you back out the June peak, then January 2008 was the peak for monthly GDP. I do not have any reason to believe that the committee will be likely to "massage" the June peak away, so that means that they will have to decide whether the employment peak or the GDP peak should have precedence. Employment is extremely important, but so is GDP for measuring the overall economy. Tough call.

So, these are my three start date possibilities, in the order that I would choose them.

1. June 2008 monthly real GDP peak. Avoids fudging the data and focuses on real GDP and the overall economy. And people already know that Q2 GDP was up strongly.
2. January 2008 monthly GDP peak. Closer to reality be removing the artificial Spring stimulus.
3. December 2007 payroll employment peak. Marks the start of a clearly visible decline.

I could be comfortable using the December 2007 start since that marks the start of the period where the economy started to fall apart. Of course, you could also go back and use the start of the "housing recession" as the true beginning of the end.

An article on MarketWatch by Laura Mandaro entitled "Recession arbiter is sifting GDP, jobs data - Conflicting growth trends make it unlikely NBER will make call soon: members" provides some quotes from committee members. It sounds as if they should have an answer in February or so. The biggest sticking point is not the current data, but resolving the discrepancy between the June real GDP peak and the December employment peak.

-- Jack Krupansky