Last month, we noted that the St. Louis Fed had declared in their charts that the recession was over (Dude, Where’s My Recession Bar?).

Now, it appears that with the latest G17 release on Industrial Production, the Federal Reserve is making the same assumption. They make note of this referring to several charts (below) stating:

“The shaded areas are periods of business recession as defined by the National Bureau of Economic Research (NBER). The last shaded area begins with the peak as defined by the NBER and ends at the trough of a 3 month moving average of manufacturing IP.”

They are referring to the technical definition of contractions (recessions) as starting “at the peak of a business cycle and end at the trough (as defined by the NBER).

Ron Griess observed the 3 month MA of the MANUFACTURING index:

12/31/08 101.5532 104.4655
1/31/09 98.781 101.6714
2/28/09 98.7251 99.6864
3/31/09 97.2599 98.2553
4/30/09 96.9201 97.6350
5/31/09 96.026 96.7353
6/30/09 95.6559 96.2007
7/31/09 97.2692 96.3170
8/31/09 98.4819 97.1357
9/30/09 99.108 98.2864
10/31/09 99.0424 98.8774
11/30/09 99.9374 99.3626
12/31/09 99.8848 99.6215
1/31/10 100.9264 100.2495

>

Hence, as the following charts reveal, the Fed is marking the Recession over as of Q2′s end, based upon industrial production bottom.

>

Industrial production, capacity, and utilization

Industrial production and capacity utilization

Hat tip Bob Dieli.

Category: Data Analysis, Economy, Federal Reserve

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

23 Responses to “Federal Reserve Declares Recession Over”

  1. Steve Barry says:

    Adding to Obama’s statement today that a depression is not possible now, Cramer sees a broad-based boom underway now. Now the Fed? Holy complacency.

  2. franklin411 says:

    @steve
    Every depression has been preceded by a conservative government that denied that markets can fail. Right now, we do not have such a government, so a depression is impossible. If we get anther conservative government, however, I guarantee that a depression will not only be possible, but likely.

  3. boratsagdiyev says:

    Anyone have the link from a few months ago where Barry posted 4 possible charts for S&P, probably from Dave Singer?

    One scenario showed S&P hitting a new low sometime in 2010 and one scenario showed the rally continuing.

  4. Darkness says:

    Hellloooo double dip.

  5. davossherman@gmail.com says:

    Morons: Tell that to the 34 million on food stamps or the 22% unemployed or the number of sates in worse shape then Greece.

    Try the Recession has ended and the Great Depression II has begun.

  6. davossherman@gmail.com says:

    Oh yeah, and there is no chance of a housing bubble either.

  7. call me ahab says:

    SB-

    recession is over- of course- thus why ZIRP will be continued indefinitely- because things are going so good- and BR- he’s all in on contiuned support- I guess forever- so much for Bailout Nation-

    and god forbid those damn deficit hawks ruin the economy-

    matters not that the country will soon be tripping over interest payments larger than any other expense-

    who cares about that-

    but- I am sure BR will say now is not the time to back away from supporting the economy-

    of course- it’s never a good time when the economy is dependent on it and the markets demand it-

    as if that’s going to change

  8. QOTD:

    “”Overall household indebtedness is up from $7 trillion to almost $10 trillion since 2000. On this sum, we estimate, the American consumer has an annual interest bill of more than $500 billion; a sum, by the way, that vastly exceeds his current income growth.” —Kurt Richebacher

    good thing the “Recession” is over..(?)

  9. jpm says:

    Every depression has been preceded by a conservative government that denied that markets can fail. Right now, we do not have such a government, so a depression is impossible.

    Major premise: Every X (that you know) is preceded by Y.
    Minor premise: Currently, there is no Y.
    Conclusion: X is impossible.

    Anyone else see a problem in logic?

  10. call me ahab says:

    . . . and some musings regarding housing starts-

    I hope folks aren’t looking at those stats as a plus-

    look at it as a minus-

    The home buyer tax credit requires contracts to be signed by April 30 and closings no later than June 30-

    Builders are going to do all they can to get as many folks as possible signed and closed by June- strike while the iron is hot- and it’s an understandable business decsion based on incentives that will expire and Spring being the busiest season for home buying-

    after that- expect sales to go over a cliff for the remainder of the year

  11. TakBak04 says:

    @Steve Barry Says:
    February 17th, 2010 at 12:09 pm

    Adding to Obama’s statement today that a depression is not possible now, Cramer sees a broad-based boom underway now. Now the Fed? Holy complacency.

    ———-

    CNBC seems to have given Kramer a new Noonday slot where he’s doing “Mad Money I” starting today. He was pumping the stocks and praising the Stimulus, plus his guest was Austin Goolsbie. And, yes he was carrying on about the coming “boom.”

    The cynic in me says that an effort is underway to herd those of us out here in the hinterlands who have been hiding in bonds, CD’s and treasuries back into the stock market, ASAP. Maybe the 401-K hardship redemptions plus the general fear and reluctance of older investors who pulled out of their Mutual Funds last year is starting to cause some heavy concern.

    It’s surprising because I didn’t think Kramer’s evening show was doing that well. Why else would they give him two time slots except to do what he did before. “BUY….BUY…BUY!” Personally (cynic here again) I would take this as a definite sign there are more bad times to come. Second dip? Maybe not…but harder times for sure.

  12. cortezj29 says:

    It is really meaningless whether the “recession” is over. The presence of ZIRP is THE sign of an economy on life support. Essentially, the power of debt deflation is overwhelming any growth.

  13. franklin420d says:

    Every depression has been preceded by a conservative government that denied that markets can fail. Right now, we do not have such a government, so a depression is impossible

    Hey, little bro I like your premise. So what you are saying is, if I believe something long and hard enuff it make it true.

    I believe I can fly – If I deny gravity long enuff it will make it true.

    I believe you are a good teacher.

    Damn don’t see either of those happening, but I will keep believing.

  14. wally says:

    Germany thought their recession was over, too.

    Surprise!

  15. karen says:

    The Federal Reserve should be more careful with its words.. Recession Over reminds me of Subprime Contained.. and we all now how well that held up.

  16. torrie-amos says:

    roflmao, cortez said it best

  17. forester_dude says:

    @wally
    It also reminds me of this:
    http://binside.typepad.com/.a/6a00d834fd7f7353ef010536ccc557970c-400wi

    Of course, this time must be different…;-)

  18. ashpelham2 says:

    Recession is over if one sticks to the traditional definition of a recession. But are we in better shape? Are we heading in the right direction, as opposed to 12 months ago. Not sure. The little growth we are seeing is in government and healthcare. Neither of which me or my spouse work in, so we still think there’s a recession.

    Back to work…If I don’t get some sales, we are going to be looking at a Great Depression localized to my street address…

  19. Fritzskelly says:

    Dear Federal Reserve,

    See Japan circa 1990-2009 and embrace your future.

  20. Pat G. says:

    I feel much better now, after that announcement…

  21. Recession???

    What recession.

    Here in Australia it has been business as usual.

  22. [...] Yesterday, we noted that the Fed seems to have declared the end of the recession based upon Industrial Production (Federal Reserve Declares Recession Over). [...]

  23. Mike in Nola says:

    It’s nice to live in such a tidy world where everything can be characterized by looking at a few indicators.