The NBER has officially dated the end of the Great Recession June 2009:

The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 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 1973-75 and 1981-82, both of which lasted 16 months.

In determining that a trough occurred in June 2009, the committee did not conclude 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 downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date. (emphasis added)

No, we are not still in a recession as some people have asserted. No,its not a depression. The wheel has turned, the trough is more than a year behind us. This is not a robust recovery, but the economy is now expanding, not contracting.

If you are unsure of this, consider the charts of the 5 major economic factors the NBER considers in their dating criteria below:

>

Real GDP

Real Income

Industrial Production

Retail sales

Employment (NFP)


Note the last chart — NFP — it goes back to 2000 instead of 2004.  The NBER may have jumped the gun when they declared the recession over in November 2001; Employment did not bottom for another 2 full years!

>

The charts are from the nice folk at Economagic, who need to adjust their recession dating (I did it manually) Wow — that was fast!

>

>

Source:
NBER Business Cycle Dating Committee Announces Trough Date
Business Cycle Dating Committee
National Bureau of Economic Research, September 20, 2010
http://www.nber.org/cycles/sept2010.html

PDF here

Category: Economy

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.

63 Responses to “Its Official: Recession Ended June 2009”

  1. rob says:

    If we’re out of the woods, then JACK up the rates so I can start making some money off interest! I freakn tired of ZIRP!

  2. insaneclownposse says:

    life in the liquidity trap is quite comfortable…. thanks NBER!

  3. ironman says:

    The NBER is about five months late to their own party, but it’s still nice to have the official confirmation….

  4. Here’s why they delayed the announcement:

    The committee waited to make its decision until revisions in the National Income and Product Accounts, released on July 30 and August 27, 2010, clarified the 2009 time path of the two broadest measures of economic activity, real Gross Domestic Product (real GDP) and real Gross Domestic Income (real GDI). The committee noted that in the most recent data, for the second quarter of 2010, the average of real GDP and real GDI was 3.1 percent above its low in the second quarter of 2009 but remained 1.3 percent below the previous peak which was reached in the fourth quarter of 2007.

    Identifying the date of the trough involved weighing the behavior of various indicators of economic activity. The estimates of real GDP and GDI issued by the Bureau of Economic Analysis of the U.S. Department of Commerce are only available quarterly. 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 here), real 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.

  5. Low Budget Dave says:

    The thoguht process seems to confirm the terminology that the “recession” has ended. The verdict on the word “depression” won’t be settled for a few years. Unless the word has been redefined, it seems to me that economic activity can rise and fall several times during a “depression”.

    U.S. Industrial production was already headed back up by mid 1933. Was the NBER around back then? Do they mark the official end of the great depression in August of 1933? If so, then I suppose the slump from mid 1937 to mid 1938 was a separate and relatively small recession.

    Where I live, unemployment is expected to remain above 10% for the next 12 months, with U6 above 20%. If this is not a depression, then what is it? A market correction? I suppose according to the NBER all of this will be solved when the unemployed people finally realize their place in life and sell themselves as indentured servants to rich people.

  6. BennyProfane says:

    “In the end the Party would announce that two and two made five, and you would have to believe it. It was inevitable that they should make that claim sooner or later: the logic of their position demanded it. Not merely the validity of experience, but the very existence of external reality was tacitly denied by their philosophy.”

    war is peace
    freedom is slavery
    ignorance is strength

  7. Yes, Benny, we all read 1984.

    Now, if you have something that challenges the data contained in those 5 charts, I am all ears. Otherwise, spouting cliches and aphorisms are not the stuff of insightful comments

  8. VennData says:

    NBER leader Martin Feldstein has fought this all long as possible. A partisan, who couldn’t admit that the recession ended… showing his loud-mouthed claims were as wrong as his political party’s…

    http://www.ritholtz.com/blog/2010/04/rally-rank-27-of-4237/

    I hope you didn’t listen to the GOP lies….

    http://online.wsj.com/article/SB123629969453946717.html

    …but did listen to the President.

    http://www.usnews.com/articles/news/obama/2009/03/04/obama-says-buy-stocks-now-good-deals-there-for-long-term-investors.html

    It’s long past the time for the FED to raise interest rates a bit.
    If you didn’t, then you allow partisan ‘feelings” to interfere with rational investing decisions.

  9. gavingunhold says:

    To the 90% who don’t work for Wall Street, I bet it still feels like a Recession. And to 9% who don’t have a job, I bet it feels like a Depression. But the NBER says it’s over, so I can go home and relax and relish in my poverty and debt.

  10. JimRino says:

    That last chart show’s US CEO’s playing POLITICS with OUR JOBS.
    My guess is they won’t start hiring until after the Nov. elections.
    The “CEO”/ “Rich” are different from you and me, they are Immoral.

  11. subscriptionblocker says:

    Inflection point aligns with shadowstats: http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

    Wonder what absolute GDP per capita is relative to 1999 (constant dollars with accurate inflation) ?

  12. Low Budget Dave says:

    Glad to see that you deleted the partisan comment. It raises the level of the discussion a bit. Naturally, I was thinking of a really sarcastic way to point out that the NBER is not part of the administration.

    Having said that, it is not always helpful to find out about the official start and end of a recession, particularly when it is 17 months after the fact and so many questions remain. This is the equivalent of the NBER posting a “Mission Accomplished” banner: Seems a little early in the war to declare victory.

    ~~~

    BR: I bumped back about 4 hours . . .

  13. plantseeds says:

    “That last chart show’s US CEO’s playing POLITICS with OUR JOBS.”

    actually i would argue that the last chart shows how US CEO’s really don’t need to hire anyone and are playing their cards well. after all the recession is over, it says so right up above.
    somehow now somebody “owes” us jobs? i don’t think so. I think demand creates jobs. so could it be that “we” owe demand to CEOs. I think the AFL-CIO is calling you.
    http://www.avine.co.uk/index.php?page=pages/Why_join_a_union_1.htm

  14. [...] the full NBER report here.  Ritholz has some more charts and insights at The Big [...]

  15. jeg3 says:

    I agree the NBER analysis can be correct for this snapshot in time, I do not believe it captures economic reality from a wider viewpoint and longer time-frame. Lets look at other views on the economic analysis other than the official one:

    “The aggregate data is unambiguous: the US economy is delevering in a way that it hasn’t done since the Great Depression, from debt levels that are the highest in its history.”
    http://www.debtdeflation.com/blogs/2010/09/20/deleveraging-with-a-twist/
    “The good news in the latest Flow of Funds data is therefore that a slowdown in the rate of deleveraging can impart a positive impetus to employment. However the bad news is that the economy is now hostage to changes in the rate of deleveraging, from levels of debt that far exceed anything it has ever experienced beforehand. Since much of this debt was taken on to finance speculation on asset prices rather than genuine investment, it is highly likely that deleveraging will accelerate in the future, as speculators tire—literally as well as metaphorically—of carrying large debt loads that finance stagnant or declining asset prices.”

    “With growth slowing in the 2nd half (and into 2011), this means the unemployment rate will probably tick up too (unless the participation rate falls further).”
    http://www.calculatedriskblog.com/2010/09/double-digit-unemployment-rate-early.html

    “The poverty rate rose to 14.3 percent during 2009 from 13.2 percent the previous year as household income stayed flat and the number of people without health insurance reached its highest level since such data has been collected, the government announced Thursday.”
    http://www.huffingtonpost.com/2010/09/16/poverty-rate-jumps-to-tk-_n_719057.html

    With ~70% of the economy based on consumer spending:
    “In addition, a collapsed housing and stock market, combined with increased inequality even before the Great Recession, have drastically reduced Americans’ personal savings. In short, the “retirement stool” no longer is stable and secure, and suddenly Social Security, which always has been viewed as a supplement to private savings, is the only leg left for hundreds of millions of Americans. “
    http://www.huffingtonpost.com/steven-hill/dont-cut-social-security_b_718988.html

    Further future decrease in spending:
    “For the Unemployed Over 50, Fears of Never Working Again”
    https://www.nytimes.com/2010/09/20/business/economy/20older.html?_r=1&ref=business

    The future does not look bright with the econ-data trends in reverse of what is economically prudent:
    “Rather than rely on a single anecdotal piece of evidence, I am compelled to point out that defaults, foreclosures and walkaways are at record levels, and retail sales have fallen dramatically.”
    http://www.ritholtz.com/blog/2010/08/mortgage-defaults-driving-retail/

    http://www.businessinsider.com/the-7-million-shadow-inventory-could-set-off-a-housing-price-avalanche-2010-9

    It can be summed up by:
    “Failed states and ideologies”
    http://bilbo.economicoutlook.net/blog/?p=11602

  16. iratherbe says:

    Well perhaps Hussman probably challenges those assertions better than Benny.

  17. b_thunder says:

    personal income almost @ all-time high level? with U-6 unemployment at or neat 17%???
    i guess SOMEONE is making a killing out there (my guess: either selling crap to the Fed, or front-running the Fed)

    Regardless, does it really matter all that much if, for the sake of argument, all the indicators that are used to define recession (real GDP, real income, employment, industrial production, and wholesale-retail sales) are +0.05 or -0.05 ??? (round out to +0.1 or -0.1)
    0.2% – does it really make that much of a difference for 95% of Americans?

  18. rootless cosmopolitan says:

    @VennData:

    NBER leader Martin Feldstein has fought this all long as possible. A partisan, who couldn’t admit that the recession ended…

    So he supposedly is a partisan and motivated for his views by this. Compared to whom? You? I mostly see politically motivated partisan blubber coming from you here. Like your comment here again. Nothing that really refers to data or analysis and refutes Feldstein’s views on those grounds. I’m only surprised that you didn’t mention the “tea party” once more. Why should anyone listen to your president? To any president? Or to the GOP, whatsoever? Look at the relevant data. Read what people who thoroughly analyze data have to say. And, most importantly, think for yourself.

    You believe in what the president says. I get from you that you base your investment decisions on this. The economic reality doesn’t care about what the president says and what you believe, though.

  19. BennyProfane says:

    “Yes, Benny, we all read 1984.”

    I doubt that. Most are herded too easily.

    ~~~

    BR: *sigh*

    That’s sad . . . I guess we cannot assume basic literature literacy ?

  20. Long term says:

    Real GDP, Industrial Production, and Retail Sales have risen significantly–all to levels higher than in 2004. On the other hand, I need a straight-edge to tell if NFP have risen above 2004 levels. In my estimation, the missing piece is a chart that would add international perspective. Have the Fortune 500′s added jobs abroad to allow for a smaller rise in US payrolls? If not, then the US has found a way to be more productive with fewer people. Either way, in the long term, I doubt the US can stay robust or resilient if it does not add jobs. Which is not to say that a great deal of the US population cannot remain relatively wealthy and comfortable; they likely will.

  21. John Boyd says:

    Instead of looking at a bunch of charts and believing in the tooth fairy, I would be interested in BennyProfane or Barry Ritholz putting together a coherent economic argument to explain the blatant contradictions between what the charts show and what the other 99% of the population who don’t read such charts is experiencing on the street! I especially am interested to hear your arguments explaining how personal income is rising as well as retail sales. I wait with bated breath!!!

  22. rootless cosmopolitan says:

    @subscriptionblocker:

    Based on what am I supposed to believe that the shadowstat data are accurate, or at least more accurate than the government data?

  23. HEHEHE says:

    $11T was spent by the government in one manner or another to purchase a couple quarters of modest GDP growth:

    http://money.cnn.com/news/storysupplement/economy/bailouttracker/index.html

    The consequence of that expenditure has allowed the NBER to claim that the “2007 Recession” is over.

    Ok fine. However, the “growth” of which is being spoken of is apparently over as future government stimulus/bailouts are likely not going to be stomached by voters.

    So now what? How does an upward trajectory continue? How is it even possible given the amount of bad debt that is still on banks and individuals books? What big technological advancement is there that could make the economy rev again? QE may make the stock market rise for a bit but what does it do for job creation?

    Tell me how the claim of “Recession Over” isn’t the equivalent of GWB standing on his air craft carrier with his “Mission Accomplished” banner?

  24. obsvr-1 says:

    seems we should be using the economic indicators with respect to a return to the mean or the trendline. By using this as the threshold by which the economy needs to return before the end of a recession is called.

    If you slam into ground and crater, then claw yourself half way out are you really out of the hole ?

  25. DeDude says:

    VennData@11:45;

    Great links, thank you. Does this mean that Obama called the March 2009 low before Berry called it? Maybe we need Obama for investment adviser and Berry for president ;-)

  26. tagyoureit says:

    I didn’t read 1984, I had it on cassette. PANAMA! :P

  27. constantnormal says:

    @BR

    So, with the economic recession officially “over”, are you moving to a less-cash, more-fully-invested position in the funds you manage? Or is this the appropriate place to insert that “the economy is not the same as the stock market”?

    ~~~

    BR: EXACTLY !

  28. Marc P says:

    These are very interesting charts. However, they would be more indicative of the health of the economy if they were corrected for the artificial stimulus of recent government spending. After all, if the health of the economy is measured by GDP, and GDP is the amount spent including government spending, then it is a simple matter to mask reality by simply borrowing money (for printing money) and spending. It seems to me that these numbers mean little unless they are corrected for the increase in government spending and money-printing over the last two years.

    By the way, a question about government accounting: if the government allows the Fed to print $1 trillion and use it to buy $500 million worth of CDOs from a few Wall Street firms, does that act increase GDP?

  29. constantnormal says:

    @b_thunder

    b_thunder Says: September 20th, 2010 at 12:49 pm
    personal income almost @ all-time high level? with U-6 unemployment at or neat 17%???

    Nice catch. I think that those two charts (NFP and Real Income) together form a near perfect portrait of pillaging.

    There doesn’t seem to be any other likely way to explain them.

    And it shows the utter hopelessness of getting a tax increase enacted upon those who are stealing from the rest of us. (And it IS stealing, when one buys elected officials to craft tax legislation that taxes the little people while letting the fat cats haul away profits by the truckload)

  30. austincompany says:

    Obama & Co. have saved us! The Great recession is over. It’s time to party and re-elect those Democrats that have saved the day. Good times are here again – gee, I’m glad that’s over…

  31. louis says:

    Agree with austin. That’s great news heading into the election season. I’m glad it’s all over. Wages , Employment and Property values will be rising tomorrow.

  32. phb says:

    Not sure I am buying this one Barry. Economy expanding based on NBER math? Not feeling it.

  33. phb

    Its got nothing to do with the NBER — they simply use the same data everyone else has access to

    See those 5 charts? When they are heading down, economic activity is contracting; heading up, expanding. When all 5 peak and reverse, its the beginning of a recession. When all 5 trough and reverse, its the end . . .

  34. Freestate says:

    I think all that Barry pointed out is that the economy is recovering from its low point. No one said that things are better than they were when this thing started. The NBER just dates peak to trough – not peak to peak. The question now is: what is the sustainable path from here? Well, let’s let one of the experts on debt driven financial crises give us an opinion: “The American economy could experience painfully slow growth and stubbornly high unemployment for a decade or longer as a result of the 2007 collapse of the housing market and the economic turmoil that followed…” according to Carmen Reinhart. “Large destabilizing events, such as those analyzed here, evidently produce changes in the performance of key macroeconomic indicators over the longer term, well after the upheaval of the crisis is over,” Ms. Reinhart wrote.

    Seems like we are on a path forward that is fairly consistent with Reinhart & Rogoff research – which has been the case about every step of the way.

  35. BennyProfane says:

    Well, if you believe that it’s all about real estate, then the chart here: http://www.calculatedriskblog.com/2010/09/moodys-commercial-real-estate-price.html should convince you that we are in a very expensive eye of the storm. Trillions of dollars, and this is all we get? Such a deal.

  36. phb says:

    @ Barry – Funny! I get it…still doesn’t smell right.

  37. mpavan says:

    What an utterly useless measure.

    So those curves bent up a bit. So what ? What the hell does it matter to the vast majority of people if the NBER says we are in a recession or not ? Are the people working ? if not, can they find meaningful work ? is their quality of life (including their health, the environment they live in, etc) improving, or not ? What are the prospects for their children ? are they happier, or less happy ?

    those things matter. which way some heavily cooked data curves does not.

  38. constantnormal says:

    @rob

    rob Says:

    “If we’re out of the woods, then JACK up the rates so I can start making some money off interest! I’m freak’n tired of ZIRP!”

    I understand you can get some tremendous yields in Greek bonds. And there are others

  39. Jojo says:

    Hey, the market is soaring today. Maybe they should wait 15 months to release all statistics? GDP, housing starts,… Then unemployment would truly be a “lagging” indicator. [lol]

  40. patfla says:

    The only one of those 5 charts that’s near its previous peak (yes, I know that’s not how ‘recession’ is measured) is Personal Income.

    If there were any kind of accounting identity that related the 5 charts (there isn’t), I’d ask: how is that even possible?

  41. mdanda says:

    And some say that the field of Economics is facing a crisis of credibility! Ha!

  42. willid3 says:

    i am guessing that in economic terms we are out of the recession, in reality we are not. but then its was the same bunch of economists who said the previous recession was over, when it really wasn’t. it was the gauges that said it was over, like this time. its not that they have been corrupted (though they might have been) its just that the economy is different. most of the economic gauges were created to measure an economy based on manufacturing. well, the US still leads in that (oddly enough) it just correlate to employment like it used to. and we don’t even attempt gauge how many jobs have been exported.

  43. cstarliper says:

    While not trying to be picky here, the chart showing PERSONAL INCOME should actually be REAL PERSONAL INCOME EXCL. GOVERNMENT TRANSFER PAYMENTS. If that data is used, the income figure looks much much worse. It is turning up, though slower and from a much lower base. Real PI is now up a whopping .03% since the June 2009 trough date.

    Also, it may be worth mentioning that the reason the recession ended but the economy seems a bit sour is because we are really dealing with the rate of change rather than levels. So if we lose 8 million jobs, but the decline has stalled or even sightly turned upward, that should satisfy the technical definition because the rate of change is no longer negative. However, because these things are climbing out of a low base, it will take some time before the old highs are reached, especially when measured from peak-to-peak, i.e. Dec 2007 until ?

  44. HarryWanger says:

    “…..the economy is now expanding.” True. But it’s going nowhere fast as this chart points out http://www.phil.frb.org/research-and-data/real-time-center/business-conditions-index/

    Also, regarding “the market ain’t the economy”. Been arguing this til the cows come home. I’ll also argue that when you have the 2nd largest company in the US (Apple) with an insane weighting in the SPX and COMP, the market is pretty much going to do what it does regardless of the economy.

    As long as people keep buying iStuff and Apple continues to grow, the market has no choice but to follow. Problem is one hiccup could be interesting for those indices.

  45. Andy T says:

    It’s “funny” how the Stock Market told you the economy was bottoming months and months before the economists and the data said so….

    Shows the general irrelevance of these kinds of organizations.

  46. Lamont says:

    The charts Barry is looking simply show symptoms of govt intervention, not the fundamentals of the real economy which has barely come up from the lows of the summer of 2009. GDP has been pumped up by the FEderal Reserve printing a couple trillion dollars and the federal govt pumping money into the economy via massive bond issuance. In this way the govt can push up the measure called GDP as much as it wants. This doesn’t mean the economy is getting any better, however, just that the govt is successfully able to temporarily manipulate the statistics. Real income ex-govt transfer payments is still right at the bottom of the recession levels. Increased retail sales is almost all due to increased gasoline prices, increased food prices, and government transfer payments. The industrial production numbers are mostly from inventory rebuilding and are boosted artificially because the govt doesn’t take into account the real value of imports; only the cost of the imports are subtracted from ind production and GDP, not the value add or mark up when it’s sold (this is why the US has manufactured fewer and fewer actual thing over the past decade, while the industrial production numbers have continued to increase). Employment has only come up off the bottom because of continued hiring in health care and education, which are both 50%+ fueled by govt spending (govt deficit spending more accurately). All in all, the fundamentals of the economy have not improved since the 2009 bottom, despite some statistics looking temporarily better. The economy will not be able to fundamentally improve until the trade balance is vastly improved, venture capital begins to flow into the US again, manufactures invest in the US rather than abroad, and a much larger percent of consumer debt is liquidated. Until then we remain in a depression.

  47. grambo033 says:

    I love Benny’s comment and quote from 1984. Barry sometimes speaks with the same sarcasm when breaking down the invalidity of housing data. I always have the same reaction Benny has when some economist or commentator says tax cuts don’t work. Don’t these guys look at their own paystubs anymore and see what’s taken out as a percentage of what they make? they seem to think that an extra $5k moved into the take home portion won’t make a difference and no one ever counters them. It’s not rocket science afterall. Keep after them Benny. No one said it better than Mr. Orwell.

  48. Ted Kavadas says:

    I don’t agree with the NBER’s decision or logic. However, at this point the most important aspect is the going-forward economy, which faces several highly problematical issues IMHO.

  49. Lamont says:

    Barry and many others continue to monitor certain statistics, despite them being nothing more than the symptom of the massive govt intervention. It’s the equivalent of taking medicine to help cancer symptoms. Sure the coughing and fever may go away temporarily, but the disease is still there and getting worse. And once the patient stops taking the medicine, the symptoms will come back too, often worse than ever. Of course Barry will say that the patient can continue taking the medicine for years (ie govt stimulus into infinity), but the patient will still die eventually from the disease if not cured.

  50. DeDude says:

    I guess it is all about what the definition of a word is.

    Is the economy getting better? For me or for the investment bankers? – counterasks the unemployed. Define “the economy” say I.

    According to the definition of a recession (= NBER say so) the recession is over. But since employment is always last to recover after a recession it is not over for a lot of people. Although it is long gone for the rich pigs on Wall Street.

  51. DeDude says:

    It seems that for a lot of people the recession is not going to be over until Obama has handed the White House keys over to a GOPster. To hell with the facts lets just redefine the terms and deny reality. The parameters are what they are. GDP has increased but a better understanding of underlying “organic” growth may come from deducting the 250 billion of stimulus spending in this and in the previous year. If you think the tax-cuts from the stimulus bill should be deducted then do so (although if you subtract taxcuts and home-equity withdrawal “deficit spending” then we are still in the 2001 recession). The “reaching for a conclusion” “process” that Barry complained about this morning is in full display in this debate.

  52. DeDude says:

    It seems that for a lot of people the recession is not over until Obama has handed the White House over to a GOPster. To hell with the facts lets just redefine the terms and deny reality. The parameters are what they are. GDP has increased but a better understanding of underlying “organic” growth may come from deducting the 250 billion of stimulus spending in this and in the previous year. If you think the tax-cuts from the stimulus bill should be deducted then do so (although if you subtract taxcuts and home-equity withdrawal “deficit spending” then we are still in the 2001 recession). The “reaching for a conclusion” “process” that Barry complained about this morning is in full display in this debate.

  53. obsvr-1 says:

    Now that the recession is officially over the argument about raising taxes in the middle of a recession should be muted.

  54. rootless cosmopolitan says:

    Barry,

    In a few months from here, you might regret this “all clear now – the economy is expanding, no recession, no depression” posting. You may realize that you posted it right when the new recession was imminent or had already started and that you yourself had become a contrarian indicator, since you as a skeptical one decided to run with the herd and declared it all over just before the supply side of the economy made a turn for the worse again.

    You are mostly looking at lagging variables here and the income chart apparently includes transfer payments, but you ignore leading variables of the economy like housing or consumer demand data such as:

    http://www.consumerindexes.com/

    Year-over-year demand through online purchases for discretionary consumer goods has been contracting since January again and the contraction has accelerated in recent months. It has reached a contraction rate similar to the strongest contraction rate during the previous “Great Recession”, with the difference that the new contraction has already outlasted the demand contraction of the “Great Recession”. Only now the decrease in the demand may have formed a bottom. This demand contraction will very likely show up at the supply side of the economy in the 3rd and 4th quarter, i.e. as contraction in the variables you show in the charts above.

    I also remind you that there has been a clear recession signal according to Hussman’s analysis since June based on a combination of criteria, which has never given a false signal for the available sample (since the early 1960ies).

    Is it a depression? It depends on how you define “depression”. You seem to argue that it wasn’t a depression because the recession was over according to the declaration by the NBER. But this conclusion is flawed. Even during the Great Depression, the economy wasn’t contracting for the whole time. There were also years with growing GDP embedded in the longer-duration event.

    I also see now that there has been more to your dismissal of “excessive bearishness” by others regarding the economy a few weeks ago after all.

    Oh well, why do I even bother do write all this, if it takes until the end of the day or tomorrow, when no one bothers anymore to read this thread, that this comment shows up.

    Whatever it is the NBER says now. It’s just a technical assessment with a subjective component. It may be that in the future this all will be seen as one large single event, the “Great Recession” and the new one (maybe even “Greater Recession”), latter starting in the second half of 2010, which wasn’t just one single big recession because the economy got temporarily pumped up by unprecedented government stimulus w/o inducing a self-sustaining economic expansion. Because the underlying deeper cause for the crisis of capital accumulation has not been eliminated yet.

  55. rootless cosmopolitan says:

    Barry,

    You wrote:

    See those 5 charts? When they are heading down, economic activity is contracting; heading up, expanding. When all 5 peak and reverse, its the beginning of a recession. When all 5 trough and reverse, its the end . . .

    Even these charts show that it is not like you assert here, even though four of the five charts are showing only a sample of sample size 1. This is particularly evident in the chart for the personal income.

    If one looks backward one won’t see the imminent recession. One has to look forward, i.e., at variables that are leading in the economy, not at coincident or lagging variables.

  56. [...] all seriousness, as Barry Ritholtz notes, “No, we are not still in a recession as some people have asserted. No, its not a [...]

  57. [...] Politics, Systemic Risk, Tinfoil Hat Requred with 0 Comments Mr. Big, aka Barry Ritholtz, is right to support NBER’s call on a statistical recovery and right to have lingering doubts.  I especially like reason #6 (of 10) that makes him nervous: [...]

  58. phb says:

    Seems I am not the only one to smell a fish.

  59. eternity7112 says:

    It is over for wall street and corporations, this was not written for main street. Housing market is worse than it was when this all began unemployment is at 9.5% Proverty level is at its highest lets not even mention the national debt. Cpme on people I think stupidity and greed is what got us in all this to begin with. Nothing has changed NOTHING. Main street is worse off when it began. Screw the numbers and if you believe this crap you are blind as a bat.

  60. victor says:

    If we are in a recovery why is the housing market abstaining? or is it also a lagging indicator? This lagging indicator business is getting way out of hand…soon we’ll hear that any indicator that’s not going up must be a lagging one; please!

  61. victor

    The data makes it clear that the overall economy is no longer contracting, it is expanding. But it is doing so in a very lumpy fashion, with weak housing after the boom & bust, and with poor job creation.

    A lagging indicator means that that its directional change occurs after the cycle — as 2001 recession showed, job losses continued even after the recession ended — it lags the cycle.

  62. [...] It made me think of this chart from when the NBER declared the end of the 2007-09 recession: [...]

  63. [...] models, etc.  Meanwhile, within a mere three months of the inception quantitative easing, our economy officially exited recession and started expanding [...]