Quote:
Originally Posted by Derwood
Does one track recession via jobless rate (which has grown) or by National GDP (which is also up)?
Not a loaded question; I have almost zero knowledge of economics, so I'm curious which is the more accepted methodology
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A sort of basic description of a recession was 2 or more quarters of real GDP decline. That was the basic definition for a while. Since then, the NBER has come up with a more complex methodology:
"a recession is a significant decline in 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."
And no, the fact that people argue about just how to define it precisely does not make it subjective. So according to them this recession started on December 2007. If the GDP growth figures for the last quarter are confirmed next quarter, along with a rise in industrial production and sales, they will consider the current recession over:
Business Cycle Expansions and Contractions
Unemployment deliberately does not enter the "recession equation." And that is for a simple reason: unemployment figures always lag economic recovery. Even if every single business started hiring right now, it would still take 2 or 3 months for that to show on the official figures.
Just as an example, the 81-82 recession ended on november 82, but unemployment only dipped below 10% on july 83.