Who makes the recession call?

[ShiningOne]

How does the government decide if we are in a recession or not? What indicators are used?

 

[syrenn]

Who makes the recession call: The other side.

 

[Annie]

How does the government decide if we are in a recession or not? What indicators are used?

It's official: U.S. in a recession since December 2007 - Dec. 1, 2008

It's official: Recession since Dec. '07
The National Bureau of Economic Research declares what most Americans already knew: the downturn has been going on for some time.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: December 1, 2008: 5:40 PM ET

NEW YORK (CNNMoney.com) -- The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .

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 also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said.

In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.

Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining. That has yet to take place during this recession...

 

[Flopper]

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.

 

[zzzz]

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.