Discussion in 'Politics' started by ShiningOne, Mar 26, 2011.
How does the government decide if we are in a recession or not? What indicators are used?
Who makes the recession call: The other side.
It's official: U.S. in a recession since December 2007 - Dec. 1, 2008
The classic definition of a recession is two consequentiality quarters of negative GDP growth signals the start and two consecutive quarters of positive GDP growth signals the end. The public tends to think of unemployment as the gauge, however unemployment is a lagging indicator of economic activity. If you look at the history of recessions in the US, you'll find that when unemployment has fallen for a number of months and seems to have bottomed out, then the next recession is probably not too far off. In March of 2007 unemployment hit a low 4.4% and remained relatively low into 2008. By the 3rd quarter we were in recession. The next recession will probably start some months after unemployment seems to have bottomed out.
It is usually officially called a recession after it is over with since the statistics which determine a recession come out some time after the fact. Unless it is a long recession.
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