NBER declares Recession started December 2007
According to this Reuters report, NBER has declared the recession is already 12 months old and within stricking distance of the longest post Great Depression recession on record. This isn't that surprising to anybody following the market. Though the surprising part is that the recession officially started in December of last year even though we had good, positive GDP growth in the first half of 2008. Alot on Wall Stree feared that the recession didn't start until the summer and would need as much as 18 more months to run its course. Now we likely are looking closer to the end then the beginning.
Whats interesting though is that NBER has a history of calling recessions when they are just about to end. The last recession in 2001 was called exactly the month that they later declared as the end. Does their declaration put and end to the rampant speculation of the recession and force people to finally start thinking about the end? History definitely shows that the call a recession and then it abrutly ends. It sure feels like this one will persist much longer because the economy has gotten weaker of late, but then again once the market bottoms and starts showing signs of improvement it can pull the economy out of its funk. The old saying is that you should start buying stocks half way through a recession which we've likely already passed.
Whats interesting though is that NBER has a history of calling recessions when they are just about to end. The last recession in 2001 was called exactly the month that they later declared as the end. Does their declaration put and end to the rampant speculation of the recession and force people to finally start thinking about the end? History definitely shows that the call a recession and then it abrutly ends. It sure feels like this one will persist much longer because the economy has gotten weaker of late, but then again once the market bottoms and starts showing signs of improvement it can pull the economy out of its funk. The old saying is that you should start buying stocks half way through a recession which we've likely already passed.
- The current downturn was particularly tricky to define because gross domestic product remained positive in the first half of 2008. The NBER said its committee looked at payrolls, which peaked in December 2007 and declined in every month since then, as well as real GDP and other data to determine when the recession started.
- The National Bureau of Economic Research said its business cycle dating committee members met by conference call on Friday and concluded that the economic expansion that started in November 2001 had ended. The previous period of economic expansion, which ended in 2001, lasted 10 years.
- The current recession, which many economists expect to persist through the middle of next year, is already the third-longest since the Great Depression, behind only the 16-month slumps of the mid-1970s and early 1980s.
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