Recession Not Officially Over
It ain’t over yet — at least officially.
This morning, the Business Cycle Dating Committee at the National Bureau of Economic Research — a nonprofit organization that, among other things, officially determines when recessions start and end — announced that “[a]lthough most indicators have turned up,” it has not yet decided to declare the recession through.
The report does not signal that the economy is necessarily still undergoing contraction rather than expansion — just that “indicators are quite preliminary” and “[t]he committee acts only on the basis of actual indicators and does not rely on forecasts.” (It describes how it determines peaks and troughs here.)
Harvard economist Jeffrey Frankel, a member of the Business Cycle Dating Committee, declared “[t]he recession is over” on his blog just last month, citing improvements in employment and real income. Most academic and governmental economists agree. But though gross domestic product starting rising more than half a year ago, the job market remains brutal, and several other indicators sluggish.
Martin Feldstein, the president of the committee and a Harvard professor, recently warned that there is “significant risk the economy could run out of steam sometime in 2010″ because economic stimulus “delivered much less” than it should have. A double-dip recession remains possible if not probable, hence the committee’s reticence.