It’s official: We’re in a recession

For the past 12 months, President George W. Bush has assured a skeptical nation that America’s economy is strong and that we’re not in a recession.

Today, the National Bureau of Econmic Research said what most Americans already knew: The U.S. is officially in a recession. In fact, it has been in a recession since December 2007.

Which means Bush lied.

The White House is now accepting the fact that the country is in a recession but is trying to spin the story by pointing out what it calls the positive steps the Bush Administration is taking to bring about economic recovery.

Meanwhile, the Dow closed down 700 points.

Reports CNN:

The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .

The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.

The NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began last year.

Employers have trimmed payrolls by 1.2 million jobs in the first 10 months of this year. On Friday, economists are predicting the government will report a loss of another 325,000 jobs for November.

The NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said.

In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.

Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining. That has yet to take place during this recession.

The Washington Post offers up its take:

It’s official: The United States is in a recession — and it started a year ago.

The nation’s economy peaked, and the recession began, in December 2007, the National Bureau of Economic Research announced today.

The group’s Business Cycle Dating Committee, the semi-official arbiter of these things, defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators."

While analysts have been all but certain that a recession has been underway for months, there has been some debate over exactly when it began. Last winter, employers started cutting jobs and growth slowed significantly, but the decline appears to have accelerated over the summer.

The committee concluded that the start of the recession was December 2007 — due in large part, it said in a statement, to the decline in jobs that began that month. But it noted that many other data points confirm the diagnosis.

"The committee determined that the decline in economic activity in 2008 met the standard for a recession," the group said in its statement. "Evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP, consumption, have declined sharply in recent months."

And the New York Times:

A committee of the National Bureau of Economic Research has declared that the United States is in a recession, and has been in one since December 2007.

A recession is a significant decline in economic activity, measured by the job market, inflation-adjusted income, the total amount of goods and services produced by a country and other indicators. It begins when a country reaches a peak of economic activity and ends when the country reaches its trough. The period on the way up from the trough to the peak is known as an expansion.

The most recent peak was in December 2007, and the economy has been on the way down since then. Before December 2007, the American economy had been expanding since November 2001. In other words, the expansion had lasted for 73 months. The previous expansion of the 1990s lasted 120 months.