Tuesday, September 21, 2010

Closing the Book on the Recession

It's now official: The recession that started in December 2007 ended in June 2009, according to the National Bureau of Economic Research, the group that's tasked with recording these things. We generally look at the GDP stats by quarter, but the bureau narrows that down with a little more finesse. It noted that the economy shrunk by only 0.7 percent in the quarter comprising April, May and June 2009, and figured that the economy was growing by the last of those three months. That June, real GDP, real income, employment, industrial production and retail sales all took a turn for the better.

So the recession officially lasted for 18 months, making it the longest economic downturn since the Great Depression. The earlier record-holders were the recessions of 1973-75 and 1981-82, which each lasted 16 months.

The official declaration also means that if the economy sinks back into contraction again, it will be a double-dip recession rather than a continuation of the earlier recession. The NBER economists estimate the likelihood of that happening at 25 percent.

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