CAMBRIDGE September 20, 2010 - The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion.
At its meeting, the committee determined that a trough in business activity occurred in the U. The recession lasted 18 months, which makes it the longest of any recession since World War II.
The committee noted that in the most recent data, for the second quarter of 2010, the average of real GDP and real GDI was 3.1 percent above its low in the second quarter of 2009 but remained 1.3 percent below the previous peak which was reached in the fourth quarter of 2007.
The trough dates for these indicators are: Macroeconomic Advisers' monthly GDP (June) The Stock-Watson index of monthly GDP (June) Their index of monthly GDI (July) An average of their two indexes of monthly GDP and GDI (June) Real manufacturing and trade sales (June) Index of Industrial Production (June) Real personal income less transfers (October) Aggregate hours of work in the total economy (October) Payroll survey employment (December) Household survey employment (December) The committee concluded that the choice of June 2009 as the trough month for economic activity was consistent with the later trough months in the labor-market indicators–aggregate hours and employment–for two reasons.
First, the strong growth of quarterly real GDP and real GDI in the fourth quarter was inconsistent with designating any month in the fourth quarter as the trough month.
The committee concluded that strong growth in both real GDP and real GDI in the fourth quarter of 2009 ruled out the possibility that the trough occurred later than the third quarter.
The committee designated June as the month of the trough based on several monthly indicators.In particular, in 2001-03, the trough in payroll employment occurred 21 months after the NBER trough date.