Committee Will Identify Start of Recession
A panel of private economists, used by the government to decide whether the economy is officially in a recession, will probably pinpoint a month between June and September as the start of the current downturn, the group said Wednesday.
But the panel stopped short of identifying the exact start of a recession, saying it was still too early to tell.
“It appears likely that the committee will identify a month between June and September, 1990, as the peak of activity in the economy and the onset of a recession,” said the group.
“However, because many data are still preliminary, the committee has not made a definite determination of the turning point,” added the group, which is the government’s official arbiter of peaks and troughs in the business cycle.
In a statement, the panel of academic economists said output and employment in the United States were falling.
But the committee will make a decision “only after the data show a sufficiently long and deep contraction that the episode would be termed a recession even if it were followed immediately by a strong upturn in the economy.”
The seven members of the National Bureau of Economic Research’s Business Cycle Dating Committee conferred Friday by telephone, after several members said a recession had begun.
Members of the panel agreed a recession had probably started, but they had not agreed on the exact month, said Victor Zarnowitz, emeritus professor of economics at the University of Chicago and a panel member.
The committee is unlikely to confer again before the release of fourth-quarter gross national product figures Jan. 25, Zarnowitz said.
The group defines recession as “a recurring period of decline in total output, income, employment and trade, usually lasting from six months to a year and marked by widespread contractions in many sectors of the economy.”
Economists say an official declaration of a recession might help focus the attention of financial market players and others on how to alleviate recessionary conditions.
A generally accepted definition of a recession is two consecutive quarters of shrinking gross national product.