After a year in waiting, the official recession announcement has finally come. It is always surprising how long it takes them to figure it all out, but the wait is over. Now that we have admitted we are in a recession, we can focus on how to get out of it. Kathy Lien looks closer at the announcement and adds some insight in her blog post below.
The National Bureau of Economic Recession finally admits that the US in a recession and it is about time! According to official recession dating agency, the US economy hit a peak in December 2007. According to the WSJ, the peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.
Two consecutive quarterly declines in gross domestic product is not what the NBER uses to judge a recession. They instead look at 4 key monthly economic indicators, including employment, industrial output and sales.
In the fourth quarter of 2007, GDP shrank by 0.2 percent while retail sales dropped by 0.4 percent in December. Non-farm payrolls started printing negative numbers in January with Friday’s November data expected to mark the tenth consecutive month of negative job losses.This article has been reposted from Kathy Lien. The full post can also be viewed on KathyLien.com.