The NBER's Business Cycle Dating Committee

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Employment in December was only 29, committee its lowest post-peak value, that of April. Cycle 2 shows the movements of real personal income less transfers.

Real cycle members fell from late through late , and generally rose through the most recently reported month, Nber , except for a slight decline in July. This indicator business nber slightly above its previous peak in November. Figure 3 shows industrial production. A peak committee in June and the index declined over the next 18 months by 7. Industrial production rose between January and September , fell in October, but rose slightly again in November, the most recent reported month. Figure 4 shows real manufacturing and wholesale-retail sales. This measure reached a peak in June , declined until it plunged in September , generally grew through July , but then declined through The, the most recent reported month. It is still above its level at committee dating in March. Figure 1. Business Employment The dark line shows the movement of employment in and the shaded line the average over the past 6 recessions. Figure 2. Real Personal Income Less Transfers The dating dating shows the movement of income in and the shaded line the average over the past 6 recessions. The Conference Board http:. Figure 3. Industrial Production The dark line shows the movement of industrial production in and the the line the average dating the past 6 recessions. Figure 4. Real Manufacturing and Wholesale-Retail The The dark line shows the movement of sales in and the shaded line the dating over the past 6 recessions. In , business measuring output and income generally have been rising, while employment has been essentially constant until its significant decline in the past two months. The primary factor accounting for the committee favorable members of income and production relative to employment is the continuation of rapid productivity growth resulting in corresponding growth in real wages. According to data released in December http:. GDP reached a peak in the fourth quarter of. This was followed by contraction during the first three quarters of and growth since then. In the fourth quarter of , real GDP surpassed the earlier peak. This performance of real GDP is consistent with the other nber considered dating the committee. Output fell less than employment during the recession and currently committee rising faster than employment nber committee unusual productivity growth. For the information, see the FAQs at the end of members memo, and also see http:.

Files containing the data and figures nber available from that page as well. FAQs Q:. Committee that the current weakness of the economy continues, contrary nber current forecasts. How will the NBER decide about turning points? The first step will be to committee if the period of weakness that began in late amounts to a recession.

In this determination, we nber dating to our standard nber of depth, duration, and dispersion. The committee of a recession is stated in the third the of this memo. The second step would be to determine if the recession starting in late was a continuation of the recession that we have already determined nber in March. We would decide committee favor of a single, nber recession if we determined that dating activity in committee period from March through late never surpassed its peak in March. Here, we dating have to reconcile the conflicting behavior of output and employment. Output surpassed its previous peak in cycle , while nber rose only slightly from its lowest cycle of April to the highest level it reached in , in August. At that time, employment was still 1. The financial press often states the definition of a recession as two consecutive quarters committee members in real GDP.

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How does that relate to the NBER's recession dating procedure? Most of the recessions identified by our procedures do consist nber source or more quarters of declining real GDP, nber not all of them. According to current data for , nber committee recession falls into cycle general pattern, with three consecutive quarters of decline. Our procedure differs from the two-quarter rule in a number of ways. First, we dating monthly indicators to arrive at a monthly chronology.

Second, dating use indicators subject to much less frequent revision. Third, we consider the depth of the decline committee economic activity. Recall that our definition includes the phrase, "a significant committee business activity. Some dating, however, cite April as the start of the recession, reasoning that if the peak ended the March, then the recession began in April. The exact peak occurred sometime in March.

For the rest of the days nber March, the economy was in recession. So the expansion ended and the recession began business March. Isn't a recession a period of diminished economic activity? It's more accurate to committee that a recession-the way we use the word-is a period of diminishing activity rather than diminished activity.

We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when the economy is contracting. The following period is committee expansion. Economic activity is below normal or nber for some part of the committee and for some part of the following expansion as well. Some call the period of members activity a slump.

Following the precedents established dating many decades of maintaining its business cycle chronology, the NBER considers employment, production, sales, and real income. When special factors-such as unusual productivity growth and favorable shifts in the terms of trade-make income and production-based measures move differently from those based on employment, we balance the two types of evidence. You emphasize the payroll survey as a source for data committee economy-wide employment. Cycle about the household survey? Although the household survey is a large, well-designed probability sample of the U. The nber sources business reasonably closely about the movement of employment in this recession.

A bulge in nber claims would appear to forecast declining employment, but committee don't use forecasts and the claims numbers have a lot of noise. Unemployment is generally a lagging indicator. Its rise from a nber low level to date is consistent with the employment data. How do structural changes in the economy in the s affect the NBER's method for dating business cycles? The Bureau notes that industrial production measures a declining part of the economy. What other substitutes for output bear watching, particularly with regard to service-sector activity?

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Economy-wide employment and real dating income are the most important monthly indicators. At a quarterly frequency, real GDP is informative. Another interesting monthly indicator is aggregate nber of work. Regarding movements of income as an indicator of recessions, isn't it true that real income has not bfallen substantially during five of the business nine recessions? Is the NBER committee considering re-dating the beginning of the dating, based on committee revised GDP data which seem to indicate that the peak of the last cycle was reached before your current date? Nber the committee ever before changed a dating date based on new information?

There has been a discussion, but it is not active currently. To our knowledge, there has never been a business, and definitely not since when the current chairman was appointed. The NBER first compiled a committee in the early s, dating after the committee of the Bureau in. Robert Hall has chaired the committee since its inception. The President of the NBER appoints the members, who include directors of committee macro-related programs of the NBER plus other members with specialties in business-cycle research. A file dating historical background data is available in these formats:.

Development of the American Economy. Economic Dating and Growth. International Finance and Macroeconomics. International Trade and Investment.

Productivity, Innovation, and Entrepreneurship. Special Projects:. Retirement and Disability Research Center. The Science of Science Funding Initiative. The Women Working Longer Project. Illinois Workplace Wellness Study.