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.

9 Responses to "It’s official: We’re in a recession"

  1. btchakir  December 1, 2008 at 8:58 pm

    Now we know that we have been in a RECESSION since December of 2007. All those months when most of the blogosphere acknowledged that we were in a recession, but Bush and buddies said “Oh no, we’re not” have come back into sharp focus.

    The best prediction is that we will stay in recession well into 2009 and we could go beyond that.

    The solution that Paulson and Behrnanke are pushing is to print more money and feed it to the banks… banks like AIG and Citigroup and other biggies that seem to take the bucks that we print and turn them into big cash subsidies for executives.

    I’m not sure that Obama is gearing up to do much better… but at least it is clear that the economy has to be completely restructured in this country. Wait for the big sacrifices to be spelled out that we all need to make at the consumer level. That will happen really soon.

    I want to see the big sacrifices the bank execs and automobile CEOs and folks like that are going to make. Like… how about giving up your multi-million dollar salaries for a year? You can afford to coast on your savings from last year. Just cut your vacations short and give up eating out. Hehehehe.

    Wait til they start telling us we’re not heading into a Depression. What? Ben B. did that today? And should we believe him?

    You tell me.

    Under The LobsterScope

  2. Warren  December 1, 2008 at 10:45 pm

    “Depression” from dictionary.reference.com:

    7. Economics. a period during which business, employment, and stock-market values decline severely or remain at a very low level of activity.

    Other definitions include a decline in prices, which we are also seeing. What about the current situation is not a “depression”?

  3. woody188  December 2, 2008 at 12:20 am

    See Phil Gramm, we aren’t just a bunch of whiners after all. And we’d like our regulations back please. We won’t be seeing you in office ever again. You’ll be lucky if you aren’t prosecuted for aiding and abetting tax evaders at UBS.

  4. Wayne K Dolik  December 2, 2008 at 6:32 am

    You mustn’t frighten the children. But, they do it every time and in the same way. They do it every time especially when it takes our Citizen’s basic freedom’s away. We mustn’t frighten the Children; they say. Yet some people are willing to burry their heads in the sand trying to live their lives out. They act like there is nothing wrong.

    Well the story is long over due. We are broke as a nation. Throwing money in the amount of 8 trillion dollars at Global Bankers, didn’t work. It was a massive theft of the Taxpayer’s money. America, “this is nothing like 1929”, because you have just been robbed. And, Mr. “B” says your supposed to like it.

  5. jverner  December 2, 2008 at 9:18 am

    Read before opining: NBER studies the economy to decide whether we are in a recession, but opinions come many months after the event because there must be enough data to confirm that a change has in fact occurred.

    From NBER: http://wwwdev.nber.org/cycles/dec2008.html

    I think Bush is the worst president ever, should be tried for war crimes and sentenced to Guantanamo Bay. But he couldn’t lie about a recession if NBER officially decides that issue and has just now spoken.

  6. barak  December 2, 2008 at 12:26 pm

    Bush Lied? BUSH LIED!?!?!?

    Nah, not King George, Maybe deadeye Dick, but King George, no way! Y’all just misunderstood what Bush was saying! His exact words were: “We’re not in a recession”, right? That’s what he said. You naive people mistakenly thought he meant the country. Nope! Bush meant the Bush Family, the Cheneys, and all the Congressmen and Senators as well as the well paid off not so Supreme anymore Court.

    They ain’t sufferin folks. Just we poor slobs who are on fixed incomes or on no incomes at all because their company fired, layed-em-off, or otherwise dumped them into the great morass of the unwashed and unemployed. Bush did NOT say: “You’re not in a recession.”

    Ya gotta watch the pronouns folks. These are our leaders and they choose their speechwriters very carefully. Ergo, WE must learn to LISTEN very carefully.

    If we don’t we might begin to believe that the new President-Elect was promising a different course, a new direction, while all the time he was simply asking for We The People to donate whatever nickles, dimes, quarters…

    After all, he did say: “We need change.”

  7. Bat  December 2, 2008 at 3:04 pm

    Bat

    Did anyone besides me wonder what Bush meant when he said, “Go Shopping”? I didn’t think at the time that he was just being flippant, and I still don’t…I think he, in his own cryptic way, was telling us to watch out, the economy is going down the tubes. Wonder what he knew that we didn’t? Is a puzzlement.

  8. spartacus  December 2, 2008 at 4:51 pm

    How many times did Bush and McCain say ‘the economy is strong’?

    There are still talking heads that say it now, including George Will, who was peddling that garbage on Sunday morning!

    I figured that out quite a while ago, thank you very much. It wasn’t hard. But then, I have to watch what I spend, more now than ever before: as my son is fond of saying “Thank you George W. Bush!”

    Now let’s see: Wall Street stocks are plunging, flailing about wildly; banks are closing; foreclosures are rising; unemployement’s rising; bankrupcies are increasing; businesses are closing, including some that have been around for 50 years or more; savings are falling down the tubes; inflation has been increasing, but now appears to be turning into deflation; all of this sounds familiar, doesn’t it?

    When I was making phone calls during the election, an 84 year old white woman told me she was voting for Obama. Why? Because, she said, “he’s risen from NOTHING – he’s done everything right to get where he is – and he knows what it’s like for the rest of us; these other ones always had everything. We need someone like that now. I’ve been through this before; these kids don’t know what they’re up against. I lived through one Depression, now I’m living through another, and this boy’s the only one that seems to know what to do to help us through this.” I heard similar things from quite a few of the people I called that were around her age.

    Older folks seemed to know what most people don’t want to say: this is probably a Depression.

    At least the learned ones have finally admitted it’s a recession: after the election, of course.

  9. acf  December 3, 2008 at 2:02 am

    They still believed that the had the ability to create reality through the strength of their words. Bush still thinks he can. He’s trying to blame Clinton for the fiscal crisis, and anyone but himself for his foreign policy (Iraq) screw ups. It really doesn’t matter to me what any report said about when the economy went into recession. The economy was seriously weak long before Dec 2007, and I’m as unemployed now, as I was then. The news also didn’t make me behave like a lamb, follow the flock, and rush out and sell my depressed mutual funds at fire sale prices. I’m getting tired of this flock mentality excuse the media tosses out every time the market nose dives. I could stand some temperate reporting for a change. Yelling fire in the financial theater doesn’t seem to be helping things.

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