Tracking the "OFFICIAL" RecessionWill we see a Double Dip?BY FRANK BARBERA, CMT
So it's official. Big Surprise! The US Economy is in recession. Did we really need the National Bureau of Economic Research (NBER) to help us out on that one? Going back to April 2007 and June 2007 with our articles, "Several Gauges of Recession" and "Signs of a Gathering Storm" it was clear that the economy was starting to roll over into a period of contraction and recession.
However, while many believe that the NBER was politically compromised in not wanting to acknowledge an official recession during an election year, the organization has otherwise done a good job over the years in tracking the relative start and end points of economic contractions, even if their calls have come somewhat after the fact. From their latest press release entitled, "Determination of the December 2007 Peak in Economic Activity" the NBER Committee identified Q4 2007 as the official beginning of the current contraction. They stated:
"The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.Payroll employment, the number of filled jobs in the economy based on the Bureau of Labor Statistics' large survey of employers, reached a peak in December 2007 and has declined in every month since then. The committee determined that the peak quarter of economic activity was the fourth quarter of 2007. When the monthly peak occurs in the last month of a quarter, the NBER's long-standing procedures dates the quarterly peak either in the quarter containing the monthly peak or in the subsequent quarter. Thus, the committee could have dated the quarterly peak in 2008Q1 if it had determined that economic activity was higher in that quarter than in 2007Q4. However, the committee determined that this was not the case. Most notably, both payroll employment and the income-side estimate of domestic production were lower in 2008Q1 than in 2007Q4, and the product-side estimate of domestic production was only slightly higher. The committee found that the peak quarter was the one containing the peak month, 2007 Q4"Click here for full article:http://www.financialsense.com/Market/wrapup.htm