NBER decides that the recession started in December2007
The NBER Business Cycle Dating Committee (NBER BCDC), the quasi-official arbiter of dating of recession start and end dates, has officially declared that the current recession commenced with the payroll employment peak in December 2007. It had not been clear whether they would decide to use the peak of GDP or the peak of payroll employment as their top criteria, but they decided that there was a significant enough decline payroll employment that commenced on that date.
This decision should not be too big a surprise to anyone who has been watching the data.
By definition, December 2007 was both the end of the previous business cycle and the start of the current recession. The recession technically ends when the economy begins to recover, the so-called trough, rather than when the economy completely recovers from the decline of the recession.
The committee is not forecasting when the recession might end or how deep it might become, simply because that is not something that they do. They look solely at actual economic data and do not examine or get involved with forecasts.
posted by Jack Krupansky @ 2:08 PM
1 Comments
1 Comments:
According to Keynes, the root cause of an economic downturns is an insufficient aggregate demand. When the total demand for goods and services declines, businesses throughout the economy see their sales fall off. Lower sales induce firms to cut back production and to lay off workers. Rising unemployment and declining profits further depress demand, leading to a feedback loop with a very unhappy ending.
http://nomedals.blogspot.com
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