National Bureau of Economic Research: U.S in Recession

Mon, 12/01/2008 - 4:55pm | posted by Martin Avila

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 NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began last year.

So some major economic think tanks are recognizing that we are indeed in a recession - when many of us knew it was coming in mid-2007, or earlier - thanks to people like Ron Paul and Peter Schiff.

What do they have to say about the future?

Nonetheless, several economists said the real concern is that there is no end in sight for the downturn.

Some suggested that the best case scenario for the economy is that it would reach bottom in the second quarter of 2009. And even if that happens, that would still make this recession the longest since the Great Depression.

I say minus points for NBER on missing the largest economic downturn since the Great Depression. Maybe that’s just me.

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Tagged: CNN Economy Economy Financial Crisis Great Depression Peter Schiff recession

The reason why the NBER hasn’t made the recession call until now is because, technically, we haven’t been in a “recession” by historical standards. Typically, economists define a recession as two consecutive quarters of decline in real GDP. This has been the standard by which NBER has operated.

What may be the case is that the Bureau of Economic Analysis’ data have been bullocks, and we could be seeing some stark downward revisions in GDP figures of the past few quarters. The NBER very well could be anticipating this.