The Advent of the American Recession
J. Bradford DeLong
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/
December 2001
Employment
Production
Sales
Incomes
- The NBER determined that the U.S. economy peaked in March 2001, and has been in recession since.
- The NBER examines four variables:
- employment
- industrial production
- manufacturing and trade sales
- personal income
- In this current recession these four indicators are pointing in different directions. This is not a usual recession--where all of the major indicators show that a business cycle peak has been reached within a very few months of each other.
- Sales reached a peak in August of 2000.
- Industrial production has been declining since September 2000.
- Employment has been declining since March 2001.
- And incomes continue to rise.
- This time, therefore, any dating of the business cycle peak and the recession is exceptionally hazardous.
- Indeed, the failure of the major indicators to show their standard business cycle-peak pattern raises questions about whether "business cycle theory" provides a good way to understand what is going on.