Free Markets, Free People

NBER – Recession ended in June of 2009

That’s what the National Bureau of Economic Research (NBER), our official arbiter of when we’re in a recession and when we aren’t, says the recession ended.

The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

So all those who essentially said leave it alone and the economy will pull itself out of the recession were correct.  Remember, June of 2009 was approximately 6 months after the administration took office and 5 months after the stimulus package had been approved by Congress.  Or said another way, well before any of the money it has squandered had yet been dumped into the economy.

Also note the beginning date.  The recession began in December of 2007.  By the time the Obama administration got to it, it had pretty much bottomed out and was beginning to recover.  The stimulus plan was signed into law on Feb. 17, 2009.  The recession officially ended in June of 2009 per NBER.  That’s not to say, however, that “things are better” necessarily:

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. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling 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. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

Or, an easier way to say it is that we experienced and are experiencing now what is normal to experience in a recession, but, as usual, the business cycle turns and we begin an expansion.  Note the last line – “Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.”

So again, I stress, any claim that the “stimulus” was the reason for our beginning to recover has a bunch of inconvenient determinations by NBER to overcome.  And anyone who thinks the government can get out of its way in approximately 4 months time to have any real effect (mid Feb to June) on the economy – regardless of the size of the spending it has planned to inject – simply doesn’t have a clear understanding of how this government operates.

That said, I hope NBER is correct and that we are indeed expanding.  As it stands now, though, most of the unemployed out there looking for scarce jobs most likely don’t give a rip what NBER says.  Until they’re again employed, they’re still suffering from a recession.  And that doesn’t bode well for Democrats at all in November.



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13 Responses to NBER – Recession ended in June of 2009

  • We have to expand a certain amount just to maintain and I don’t believe NBER comprehends this.  So sliding down and maintaining to me isn’t recovered. 

    I’ve always been leary of NBER’s casting of the timing of recessions.  They seem different from what I lived through, granted that’s perception possibly.  But they also seem to align to serve the Democrat’s PR purposes simultaneously with deviating from what I recall experiencing. 

    And I can’t think of a more useful talking point for the Democrats 6-7 wks before the election than to be able to declare the recession over. 

  • We may have come out of the recession in June 2009.  I actually don’t doubt that, and barring the insane amount of gov’t (Federal and State) spending we might have stayed on the path to recovery.
    I expect that sometime in the future that the NBER will say that we entered into another recession sometime around March/April of 2010.  They are likely already thinking that, which is a possible reason as to why they’ve waited 18 months to announce the end of the recession.
    I would guess that they got a little “nudging” to announce some good news on the same day as Obama’s town-hall propaganda otherwise they likely would’ve continued to keep their mouths shut.

  • Even had we known for sure, that wouldn’t have stopped Obamaco from doing their stimulus thing.

    Collectivists are unable to ever embrace a “leave them alone and they’ll come home wagging their tales behind them” strategy. That leaves no room for them to twiddle with things. Cynically speaking, it also leave no room for graft and payoffs to their own special interests.

    • Right.  Part of the Collective madness (small pun) is the fundamental belief/conceit/delusion that there ARE essential people…and, of course, they are them.  Wonderfully reduced to a statement like, “We are the ones we’ve been waiting for.”
      That kind of mind cannot grasp…or utterly hates…the notion of rational, self-governing systems (i.e., markets) that work best  when left ALONE, and which are too complex and fluid for them to really BEGIN to control.

  • This could simply mean that we are now in (or rapidly approaching) a second recession, separate from the previous one.  If so, then it’s very likely that it was precipitated by the panicked government intervention that was a result of the previous one.  This includes the bailouts and arm-twisting of banks that began under Bush, as well as Obama’s continuation (and expansion) of those policies.  And congress is obviously not done, as they have deliberately held off from creating a budget for the coming fiscal year because they understand that it’s going to be so bad that it would be suicidal to reveal it prior to the mid-term elections.

  • In politics, perceptions are reality.  By some gnat-straining egg-head definition of “recession”, the one Americans are STILL in may have ended last year.  That has NO relevance to Americans who KNOW they are living in a diminished America…the one DESIGNED by the Obami.

    From my small piece yestday…

  • recession that began in December 2007

    The economy couldn’t even make it through a year of a Democratic Congress

  • They sure have a different definition of a recession than I would have thought. So a recession to them is just when the economy is on the downslope for a long enough period of time, and just when it starts to go up, even a little, recession over.

    I would have thought a recession would be, you know, a recession, like the entire time it’s below what it “should” be (which I guess is where the difficulty of definitions comes in), or at least until the recovery is to where it was before (again, tricky; what if it was unnaturally high before the recession?).

    • When a recession is truly over, you’d expect to see a rebound in growth, or at least a demonstrable resumption of normal growth, if not a rebound.  I don’t think we’re even at a normal level of growth let alone any sign of a rebound.