A peak marks the end of an expansion and the beginning of a recession. The determination of a peak date in March is thus a determination that the expansion that began in March ended in March and a recession began. The expansion lasted exactly 10 years, the longest in the NBER's chronology. A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.
U.S. economy entered recession in February, business cycle arbiter says | Reuters
To receive email when a new Economic Commentary is posted, subscribe. The unemployment rate in the United States falls slowly in expansions, and it may not reach its previous low point before the next recession begins. Based on this feature, I document that the frequent recessions prior to are associated with an upward trend in the unemployment rate. In contrast, the long expansions beginning in are associated with a downward trend. I then estimate a two-variable vector autoregression VAR that includes the unemployment rate and a recession indicator. Long-horizon forecasts from this VAR conditioned on no future recessions project that the unemployment rate will go to 3.
In truth, the announcement codifies the painfully obvious. Save better, spend better: Money tips and advice delivered right to your inbox. Sign up here. NBER is a nonprofit organization that conducts research on a wide range of economic issues. A recession is defined as a decline in economic activity that lasts more than a few months, NBER noted.
Data in this graph are copyrighted. Please review the copyright information in the series notes before sharing. Source: Federal Reserve Bank of St.