Feldstein Says Risk of Recession Double-Dip Remains: Video
The NBER's Business Cycle Dating Committee
CAMBRIDGE September 20, - The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. GDP and GDI that have been developed by two members of the committee in independent research (James Stock and Mark Watson, (available here), real personal. 7 Aug The CEPR Euro Area Business Cycle Dating Committee, which is composed of nine CEPR researchers, establishes the chronology of recessions and expansions of the eleven-original euro-area member countries plus Greece for , and of the entire euro area from onwards. The Committee. The NBER's Business Cycle Dating Committee maintains a chronology of the U.S. business cycle. The chronology comprises alternating dates of peaks and troughs in economic activity. A recession is a period between a peak and a trough, and an expansion is a period between a trough and a peak. During a recession, a.
This report is also available as a PDF file.
International Trade and Investment. Department of Commerce are only available quarterly. This report is also available as a PDF file. The Oregon Health Insurance Experiment. Similarly, during an expansion, economic activity rises substantially, spreads across the economy, and usually lasts for several years.
At its meeting, the committee determined that a trough in business activity occurred in the U. The trough marks the end of the recession that began in December and the beginning of an expansion.
The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of andboth of which lasted 16 months. In determining that a trough occurred in Junethe committee did not Nber Business Cycle Dating Committee Members that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity.
Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling 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. The trough marks the end of the declining phase and the start of the rising phase of the business cycle.
Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion. The committee decided that any future Nber Business Cycle Dating Committee Members of the economy would be a new recession and not a continuation of the recession that began in December The basis for this decision was the length and strength of the recovery to date.
The committee noted that in the most recent data, for the second quarter ofthe average of real GDP here real GDI was 3. Identifying the date of the trough involved weighing the behavior of various indicators of economic activity.
Nonfarm payroll employment reached a peak in June. International Finance and Macroeconomics. Real manufacturing and trade sales pealced in August.
Department of Commerce are only available article source. Further, macroeconomic indicators are subject to substantial revisions and measurement error. For these reasons, the committee refers to a variety of monthly indicators to choose the months of peaks and troughs.
It places particular emphasis on measures that refer to the total economy rather than to particular sectors. These include a measure of monthly GDP that has been developed by the private forecasting firm Macroeconomic Advisers, measures of monthly GDP and GDI that have been developed by two members of the committee in independent research James Stock and Mark Watson, available herereal personal income excluding transfers, the payroll and household measures of total employment, and aggregate hours of work in the total economy.
The committee places less emphasis on monthly data series for industrial production and manufacturing-trade sales, because these refer to particular sectors of the economy. Movements in these series can provide useful additional information when the broader measures are ambiguous about the date of the monthly peak or trough. There is no fixed rule about what weights the committee assigns to the various indicators, or about what other measures contribute information to the process.
How Do We Measure The Business Cycle?
The committee concluded that the behavior of the quarterly series for real GDP and GDI indicates that the trough occurred in mid Real GDP reached its low point in the second quarter ofwhile the value of real GDI was essentially identical in the second click third quarters of The committee concluded that strong growth in both real GDP and real GDI in the fourth quarter of ruled out the possibility that the trough occurred later than the third quarter.
The committee designated June as the month of the trough based on several monthly indicators. The trough dates for these indicators are:. The committee concluded that the choice of June as the trough month for economic activity click here consistent with the later trough months in the labor-market indicators—aggregate hours and employment—for two reasons.
First, the strong growth of quarterly real GDP and real GDI in the fourth quarter was inconsistent with designating any month in the fourth quarter as the trough month.
Business Cycle Dating Committee Members
The committee believes that these quarterly measures of the real volume of output across the entire economy are the most reliable measures of economic activity.
Second, in previous business cycles, here hours and employment have frequently reached their troughs later than the NBER's trough date. In particular, inthe trough in payroll employment occurred 21 months after the NBER trough date. Inthe NBER trough date is 6 months before the trough in payroll employment.
Working Papers & Publications
In both the and cycles, household employment also reached its trough later than the NBER trough date. The committee noted the contrast between the June trough date for the majority of the monthly indicators and the October trough date for real personal income less transfers.
There were two reasons for selecting the earlier date.
Nber Business Cycle Dating Committee Members The second was that real GDI is a more comprehensive measure of income than real personal income less transfers, as it includes additional sources of income such as undistributed corporate profits.
The committee's use of income-side measures, notably real GDI, is based on the accounting principle that the value of output visit web page the sum of the incomes that arise from producing the output. Apart from a random statistical discrepancy, real GDI satisfies that equality while real personal income does not.
The committee also maintains a quarterly chronology of business cycle peak and trough dates. The committee determined that the trough occurred in the second quarter ofwhen the average of quarterly real GDP and GDI reached its low point.
An Excel spreadsheet containing the data and the figures for the indicators of economic activity considered by the committee is available at that page as well. The current members of the Business Cycle Dating Committee are: David Romer, University of California, Berkeley, is on leave from the committee and did not participate in its deliberations. The trough dates for these indicators are: Development of the American Economy. Economic Fluctuations and Growth. International Finance and Macroeconomics.
International Trade and Investment. Productivity, Innovation, and Entrepreneurship. Illinois Workplace Wellness Study. The Oregon Health Insurance Experiment. He is also the Mitsui Professor of Economics at M.