Yawn, the Recession is O-v-e-r...

The National Bureau of Economic Research (NBER) has officially pronounced the recession that began in March 2001 as over, ending that November. That puts the recession’s length at eight months, exactly the length of the 1990-91 recession. It also makes it short in the context of postwar recessions, which averaged 11 months (excluding the 1990-91 downturn). This dating is controversial and could even end up being revised to yield a longer recession.

The NBER’s job was made more difficult by conflicting economic indicators. In short, while broad output (at least as measured by GDP) appears to have been rising since the last quarter of 2001, other key metrics, notably employment, have yet to turn up. It is sometimes said—incorrectly—that employment is a lagging indicator of economic activity. Employment is, in fact, the most timely measure of current economic conditions, and the divergence between employment and GDP performance was enough to give pause.

This is hardly news for a major celebration, but it is always good to get the official word that things are getting some better. We need all the confidence-building we can muster.

Economy.com (if you subscribe).