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    How They Measure the "End" of a Recession

    By Doctor Cleveland on Tue, 09/21/2010 - 3:34pm | Politics, Business

    So, despite the way the economy feels in your neighborhood, there's been an official statement that the recession ended last June. Yup. All over. That is a perfectly sound statement at the same time it doesn't mean what the rest of us mean by "end of the recession."

    Economists count recessions as ending when the economy starts to grow overall, adding more economic activity than it's losing. The last day of the recession is the last day that the economy shrank compared to the day before. The first day of the recovery would be the first day that the economy began growing (in terms of net growth) again. The "last day" of the recession is therefore the worst day of all, and the first day of the recovery is the slightly-less-horrible day that came next.

    If we applied the same standard to tracking the seasons, winter would end as soon as days stopped getting shorter, and the first day that was longer than the day before would be the beginning of spring. That would mean "spring" started on December 22 or 23, the day after winter solstice.

    Merry Christmas, all.

    Topics: 
    Politics
    Business

    Comments

    Economists count recessions as ending when it's politically expedient to do so.


    by cmaukonen on Tue, 09/21/2010 - 3:45pm

    So the economy stopped shrinking and started expanding a year ago all the while the job market kept hemoraging and economist say they see a light at the end of the tunnel, eh? When did the Kobayashi Maru scenario become the Rosey scenario?


    by Beetlejuice on Tue, 09/21/2010 - 8:36pm

    I'm not making the claim, and didn't do the analysis.

    They also didn't say that the economy didn't start to shrink again. That's what a "double- dip recession" is ... the economy slides, starts to make up some lost ground for a while, and then starts sliding again.


    by Doctor Cleveland on Tue, 09/21/2010 - 8:52pm

    Which is what it is doing.


    by cmaukonen on Tue, 09/21/2010 - 11:44pm