Recession Ended Last June, Says NBER

The recession officially ended in June 2009, the committee that determines the timing of recessions said yesterday. It added that any future downturn of the economy would signal a new recession, not a double-dip recession as some economic watchers have warned as a possibility.

During a conference call on Sunday, the National Bureau of Economic Research’s Business Cycle Dating Committee concluded that the economy bottomed out last June, marking the end of an 18-month recession that began in December 2007. This was the longest of any recessions since World War II, outpacing the 1973 and 1981 recessions by two months.

The committee said its pronouncement does not mean the economy has returned to normal capacity, as its conclusion only means that the recession ended and a recovery began in that month. As for why a future downturn would not signal a double-dip recession, the committed said its decision was based on the length and strength of the recovery to date.

A recession is a period of falling economic activity that lasts more than a few months, which is normally visible in real gross domestic product, real income, employment, industrial productions and wholesale-retail sales. A trough in business activity typically marks the end of the declining phase and the start of the rising phases of the business cycle. Typically, economic activity remains below normal in the early stages of an expansion and can last well into the expansion.

The NBER’s committee determined that June 2009 was the trough month for economic activity, as that was the low point for the real GDP and the Gross Domestic Income. It added that strong growth for both the GDP and GDI in the fourth quarter of 2009 ruled out the possibility that the trough occurred later than the third quarter.