Definitions and Determinations:

The National Bureau of Economic Research (NBER) defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” It is not “two consecutive quarterly declines in real Gross Domestic Product (GDP),” often cited as the “textbook” definition. A recession begins as the level of economic activity reaches its peak (and starts to decline). The recession ends when the economy begins to grow again.

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The NBER’s Business Cycle Data Committee, made up of ten well-respected academic macroeconomists, declares starting and ending dates for recessions. The committee’s job is to be definitive, not timely, and it may be a year or more (allowing for revisions to the economic data) before an official pronouncement is made. For example, the start of the 2007-2009 recession, which ran from December 2007 to June 2009, was not declared until December 2008, while the ending date was declared in September 2010, more than a year after the recession had ended. In the most recent recession, real GDP fell 4.0% from top to bottom, and did not exceed the previous peak until 2Q11.

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It is difficult to determine when a recession has started. GDP data are available quarterly. Nonfarm payrolls, industrial production, business sales, and personal income are coincident economic indicators (the make of the Conference Board's Index of Coincident Economic Indicators.

The nonfarm payroll figure gets the most weight in the recession determination. Nonfarm payrolls have continued to advance. Job growth has slowed in 2019, but has remained beyond a pace needed to absorb new entrants into the workforce (less than 100,000 per month).