Updated: Sept. 20, 2010
There is no official definition of recession, and no official body to decree that one has begun or ended. Indeed, a clear picture of the state of the economy usually comes months or even years later. Recessions are commonly described as two or more quarters of a declining gross domestic product.
That definition is not used by the National Bureau of Economic Research, a private, non-partisan group based in Cambridge, Mass., whose findings on swings in the business cycle have come to be generally accepted as the definitive dates for recessions and expansions. Its definition of recession is: "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."
On Dec. 1, 2008, the bureau announced that the United States economy had entered a recession on Dec. 1, 2007. On Sept. 20, 2010, it announced that the recession had ended in June 2009.
As many economists had expected, this official end date makes the most recent downturn the longest since World War II, at 18 months. Until now the longest postwar recessions were those of 1973-5 and 1981-2, which each lasted 16 months.
The bureau took care to note that the recession, by definition, meant only the period until the economy reached its low point — not a return to its previous vigor.
“In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity,” the bureau said. “Rather, the committee determined only that the recession ended and a recovery began in that month.”
This is the bureau's full description of the process:
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income,... [continues]
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