September 20, 2010

Recession Technically Ended in June 2009

Today the news is that economists have declared that the recession ended in June 2009.    The National Bureau of Economic Research (NBER) says the recession lasted 18 months from December 2007 to June 2009.  That makes it the longest recession since WWII.

The commonly cited definition of a recession is two consecutive quarters or more of negative growth.   So under that definition if the GDP is negative by any measure for 6 months then that is a recession.   The recession then ends if GDP is positive.     However the NBER does not use that definition and instead they say: "The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

Of course the economy is not exactly thriving.    Unemployment is still high and growth is fairly slow still.   However we're at least out of the recession.   

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