About this Recession...

So, remember back in April, when I stated that we weren't in a recession? Apparently, I don't know what I'm talking about, as the NBER issued a statement last month that yes indeed we have been in a recession since November of 2007.

To be fair to me, they did correct the data, and the recession started in the last quarter that I had data for. Here's an updated chart:

Now the chart does indeed dip below zero a couple of times. This alone isn't enough to warrant a recession, though... so what else was happening?

Well, there were a couple of things. First, NBER looks at factors other than GDP, "The committee believes that domestic production and employment are the primary conceptual measures of economic activity." So, they're looking at employment as well as production, and employment "reached a peak in December 2007 and has declined every month since then."

Second, since I was just looking at the GDP data, I missed an important point about the variance of that data against the Gross Domestic Income data.

The committee believes that the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real Gross Domestic Product and the quarterly estimate of real Gross Domestic Income, both produced by the Bureau of Economic Analysis. In concept, the two should be the same, because sales of products generate income for producers and workers equal to the value of the sales. However, because the measurement on the product and income sides proceeds somewhat independently, the two actual measures differ by a statistical discrepancy. ... [T]he currently available estimates of quarterly aggregate real domestic production do not speak clearly about the date of a peak in activity.

So, clearly they're looking a little deeper than I did. I'll make another post when I get that data tabulated and charted so we can examine it closer. For now, let's look at the employment data. This comes from the Bureau of Labor Statistics. I can only see monthly data there that preceeds the current recession by a month (ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt).

So, there is other data to cull through, but for now, I've at least pointed out why my previous post was inaccurate.