‘Premature’ to say recession has ended, economists’ committee says
It’s too early to say the recession is over, according to the group of economists who make the official call on U.S. expansions and contractions.
The National Bureau of Economic Research said Monday that its business cycle dating committee met to discuss whether to declare that the economy had reached a trough in the recession that began at the end of 2007. Recent speculation had been that the group would say the downturn ended last summer.
But the economists opted to stay on the side of caution.
“Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature,” the NBER said.
In terms of gross domestic product -- the measure of the economy’s total output -- U.S. growth resumed in the third quarter of last year after shrinking for four straight quarters.
GDP is just one element that goes into the NBER’s calculations. But other gauges of economic activity also have turned positive in the last six to nine months, including manufacturing activity. And in March the economy created a net 162,000 jobs, the most in three years, according to the government’s latest employment report.
The NBER, however, said that “many indicators are quite preliminary at this time and will be revised in coming months. The committee acts only on the basis of actual indicators and does not rely on forecasts in making its determination of the dates of peaks and troughs in economic activity.”
The NBER always takes its time in determining the start and end dates of economic cycles. It took until December 2008 to decide that the recession began in December 2007.
Although the seven-member business cycle dating committee on Monday took a pass on declaring that the downturn officially had ended, it reaffirmed its view that the start date was December 2007.
If the recession ended in July 2009, as some economists have speculated, it lasted 19 months. That would make it the longest one since the 43-month decline of the Great Depression, from August 1929 to March 1933, according to the NBER’s records.