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Recession still not formally over
NBER economists see signs recession has ended, but is not ready to declare new expansion.
August 6, 2002: 4:33 PM EDT

NEW YORK (CNN/Money) - The research group that declares the start and end of U.S. economic recessions said again Tuesday that it saw some signs the latest recession may be over, but was not ready to formally declare that a new expansion had begun.

The National Bureau of Economic Research's business-cycle dating committee noted that payroll employment, its most important measure of economic activity, seemed to have stabilized in recent months, pointing to the possibility that the recession that began in March 2001 is over.

But the committee said it could be several months before it makes a formal declaration of a new expansion, because of data revisions and the possibility that the economy could fall into contraction again. The committee noted that it waited until December 1992 to formally announce that a recession had begun in March 1991.

The NBER committee -- which, until recently, included one of the newest members of the Federal Reserve Board, Princeton economist Ben Bernanke -- defines a recession as "a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail sales."

Bernanke's chair on the NBER committee was filled by Gregory Mankiw of Harvard University.

There is no official definition of a recession, though many people use two straight quarters of shrinking gross domestic product (GDP) as a rule of thumb. In the latest downturn, GDP contracted in three straight quarters.

The Labor Department reported last week that non-farm payrolls grew by just 6,000 jobs in July, the third straight month of gains.

Two other measures of economic strength watched by the NBER, industrial production and personal income, have risen this year, while wholesale and retail sales have been volatile.  Top of page

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