Nber business cycle dating committee. Business Cycle Dating Committee, National Bureau of Economic Research

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NBER Business Cycle Dating Committee

nber business cycle dating committee

A recession is a period between a peak and a trough, and an expansion is a period between a trough and a peak. Payroll employment, the number of filled jobs in the economy based on the Bureau of Labor Statistics' large survey of employers, reached a peak in December 2007 and has declined in every month since then. The committee noted that the broadest measure of economic activity -- gross domestic product in constant dollars -- had finally surpassed its previous peak by the third quarter of 1992. The committee determined that a peak in economic activity occurred in the U. The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment. The Quarter of the Peak The committee determined that the peak quarter of economic activity was the fourth quarter of 2007. Similarly, during an expansion, economic activity rises substantially, spreads across the economy, and usually lasts for several years.

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Information on Recessions and Recoveries, the NBER Business Cycle Dating Committee, and related topics

nber business cycle dating committee

The chronology comprises alternating dates of peaks and troughs in economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity. Thus, the currently available estimates of quarterly aggregate real domestic production do not speak clearly about the date of a peak in activity. However, because the measurement on the product and income sides proceeds somewhat independently, the two actual measures differ by a statistical discrepancy. For a discussion of the difference between payroll and household survey employment measures, see Mary Bowler and Teresa L. The committee maintains a chronology of the U.

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NBER Business Cycle Dating Committee

nber business cycle dating committee

Only by December did the overall pattern of economic activity appear to be strong enough to warrant the determination of the trough date. The committee believes that the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real Gross Domestic Product and the quarterly estimate of real Gross Domestic Income, both produced by the Bureau of Economic Analysis. The Month of the Peak The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession. The product-side estimates fell slightly in 2007Q4, rose slightly in 2008Q1, rose again in 2008Q2, and fell slightly in 2008Q3. First, it covers only goods and not services. Second, it does not deduct the sales of imported goods.

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Statement of the NBER Business Cycle Dating Committee on the Determination of the Dates of Turning Points in the U.S. Economy

nber business cycle dating committee

In the third month, it is two-thirds of the quarter's value plus one third of the next quarter's value. It rose somewhat in October with the resumption of oil production disturbed by hurricanes in the previous month. The source appears in the appendix. The Committee applies its judgment based on the above definitions of recessions and expansions and has no fixed rule to determine whether a contraction is only a short interruption of an expansion, or an expansion is only a short interruption of a contraction. Thus, the committee could have dated the quarterly peak in 2008Q1 if it had determined that economic activity was higher in that quarter than in 2007Q4. A recession is 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.


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Business Cycle Dating Committee, National Bureau of Economic Research

nber business cycle dating committee

Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. Websites: Federal Reserve Board industrial production index: Bureau of Economic Analysis, U. Business Cycle Dating Committee, National Bureau of Economic Research This report is also available as a. It determined that the most recent trough occurred in the first quarter of 1991. Real manufacturing and wholesale-retail trade sales from the Census Department is another monthly indicator of output.

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Business Cycle Dating Committee, National Bureau of Economic Research

nber business cycle dating committee

The Committee's use of these indicators in conjunction with the broad measures recognizes the issue of double-counting of sectors included in both those indicators and the broad measures. In concept, the two should be the same, because sales of products generate income for producers and workers equal to the value of the sales. Our measure of real personal income less transfers peaked in December 2007, displayed a zig-zag pattern from then until June 2008 at levels slightly below the December 2007 peak, and has generally declined since June. It also considers quarterly indicators and maintains a quarterly chronology. The income-side estimates reached their peak in 2007Q3, fell slightly in 2007Q4 and 2008Q1, rose slightly in 2008Q2 to a level below its peak in 2007Q3, and fell again in 2008Q3.

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NBER Business Cycle Dating Committee

nber business cycle dating committee

This measure has quite restricted coverage-it includes manufacturing, mining, and utilities but excludes all services and government. The committee's primary role is to maintain a monthly chronology of the business cycle. Because the real value of imports declined substantially over the relevant period, the measure understates the growth of output. In the second month, it is the quarter's value. For this purpose, the committee mainly relies on monthly indicators. Two other monthly indicators had declined to close to their minimum values by early 1991, but continued to decline slightly for the rest of 1991.

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Business Cycle Dating Committee, National Bureau of Economic Research

nber business cycle dating committee

Further Comments This announcement was originally posted on December 1, 2008 and then revised on December 11, 2008. This series reached a peak in December 2007 and has declined every month since then. Christina Romer of the University of California, Berkeley, resigned from the committee on November 25, 2008, and did not participate in its deliberations of November 28. The choice of March 1991 as the trough date was based primarily on the fact that various averages of the monthly indicators reached clear troughs in that month. The committee noted that the behavior of the quarterly estimates of aggregate production was not inconsistent with a peak in late 2007. The Committee does not have a fixed definition of economic activity. The committee found that the peak quarter was the one containing the peak month, 2007Q4.

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Information on Recessions and Recoveries, the NBER Business Cycle Dating Committee, and related topics

nber business cycle dating committee

In this version we use the real sales from the Bureau of Economic Analysis. The committee had waited to make the determination of the trough date until it was confident that any future downturn in the economy would be considered a new recession and not a continuation of the recession that began in July 1990. The income-side estimate of output reached its peak in the third quarter of 2007. The committee maintains a chronology of the beginning and ending dates months and quarters of U. This change did not have any effect on our determination of the peak date. The committee determined that the decline in economic activity in 2008 met the standard for a recession, as set forth in the second paragraph of this document. All evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion.

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