It's Official: We're in Recession!

It seems obvious that we've been in recession when the pandemic shutdown happened. However, the unofficial definition of a recession is two quarters of declining gross domestic product (GDP). The National Bureau of Economic Research (NBER) calls recession and they did that today, June 8, 2020, saying it started in February; that is, economic activity peaked then. GDP data is not in yet for the second quarter of 2020, but there was plenty of information ("significant decline in economic activity") available. I've blogged about unemployment filings and unemployment rates. Consumption numbers also are down.

The NBER is an American nonprofit founded by economist Wesley Clair Mitchell in 1920. It is located in Cambridge and, not surprising, the current president and CEO is MIT professor James Poterba. The Business Cycle Dating Committee of the NBER determined the peak was in February, the end of the expansion that began in June 2009 (that's 128 months, the longest recorded). They don't have an official government capacity to declare recessions, but have been accurate enough so it is accepted they have the "official response." So far, no one is defining a depression, including the NBER. Stay tuned; they may make the first definition and declaration.