Monday, December 01, 2008

It's Official

The announcement was only a matter of time... but welcome to the eleventh recession since World War II. While most of us have felt it in our guts, this recession "officially" started in December 2007 and as such it is already one of the longest at a year and counting. Only two post WWII recessions (November 1973 to March 1975 and July 1981 to November 1982) have lasted this long. This is a bad sign and this could make this recession the longest since the Great Depression. Hitch up your belt a notch and you might even consider suspenders. It may be a long and hairy ride.

The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy.

The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.

"The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment," said the group's statement. "This series reached a peak in December 2007 and has declined every month since then." [...]

The NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said. In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.

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