Q: What is the basic job of the Business Cycle Dating Committee? A: The NBER’s Business Cycle Dating Committee maintains a chronology of US business cycles. The chronology identifies the dates of peak and trough months in economic activity. The peak is the month in which a variety of economic indicators reach their highest level, followed by a significant decline in economic activity. Similarly, a month is designated as a trough when economic activity reaches a low point and begins to rise again for a sustained period. Q: What is a recession? What is an expansion? A: The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee's view is that while each of the three criteria-depth, diffusion, and duration-needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another.
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For example, in the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief. The committee subsequently determined that the trough occurred two months after the peak, in April 2020. An expansion is a period when the economy is not in a recession. Expansion is the normal state of the economy; most recessions are brief. However, the time that it takes for the economy to return to its previous peak level of activity may be quite extended. Q: gay daddy If the most recent trough was in April 2020, is it correct to say the expansion started in April or in May? A: The NBER chronology does not identify the precise moment that the economy entered a recession or expansion. In the NBER’s convention for measuring the duration of a recession, the first month of the recession is the month following the peak and the last month is the month of the trough.
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Q: How is the duration of expansions and contractions calculated from NBER peak and trough dates? A: bareback Suppose there is a peak in March and a trough in September of the same year. Because April counts as the first month of the recession and September counts as the last month of the recession, the duration of the recession is six months. If there were a peak in June of the following year, then the expansion would have a duration of nine months, with October of the previous year as the first month and June of the current year as the last month. Q: What indicators does the committee use to determine peak and trough dates? A: The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers (PILT), twitter.com nonfarm payroll employment, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, employment as measured by the household survey, and industrial production. Po st h as been gener ated with GSA Co nt ent Generator DEMO!
There is no fixed rule about what measures contribute information to the process or how they are weighted in our decisions. Q: How does the committee's quarterly chronology relate to its monthly chronology? A: The committee makes a separate determination of the calendar quarter of a peak or trough, based on measures of aggregate economic activity over the relevant quarters. Generally, gay daddy the peak or trough quarter contains the peak or trough month, but there are exceptions, with 2019Q4 the most recent. The red highlights in the Excel File available on the NBER website indicate when the peak or trough month has been outside the peak or trough quarter. Two measures that are very important in the determination of quarterly peaks and troughs, but that are not available monthly, are the expenditure-side and income-side estimates of real gross domestic product (GDP and GDI). Q: Where does the committee obtain the data for the indicators that it generally consults in determining the dates of its monthly and quarterly chronologies?
