Recession | Official NBER Definition

The National Bureau of Economic Research (NBER) is in charge of deciding when the United States of America is officially in recession. According to the NBER, 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".

In the United Kingdom, UK, a recession is defined as two consecutive quarters of negative economic growth, as measured by the Government's GDP figures.

It often takes NBER several months to declare an official recession and that is subject to later revision.

"A recession involves a substantial decline in output and employment," NBER says. "In the past six recessions, industrial production fell by an average of 4.6 per cent and employment by 1.1 per cent. The bureau waits until the data show whether or not a decline is large enough to qualify as a recession before declaring that a turning point in the economy is a true peak marking the onset of a recession."

From www.independent.co.uk:

Despite dating the last recession to March 2001, the NEBR said that the terror attacks of 9/11 that year were a possible cause. "Before the attacks, it is possible that the decline in the economy would have been too mild to qualify as a recession. The attacks clearly deepened the contraction."
"A recession involves a substantial decline in output and employment," it says. "In the past six recessions, industrial production fell by an average of 4.6 per cent and employment by 1.1 per cent. The bureau waits until the data show whether or not a decline is large enough to qualify as a recession before declaring that a turning point in the economy is a true peak marking the onset of a recession."

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The Economic Cycle Research Institute, or ECRI, is an independent forecasting group based in New York publishes a "Weekly Leading Index" also known as WLI. The WLI and the WLI growth rate are designed to predict future turning points in the business cycle (recessions and recoveries.) See:

ECRI WLI Growth Rate Falls to Lowest in Six Decade History

ECRI Articles:

October 30, 2008: ECRI Warned Us; We Are In A Recession Now
March 28, 2008: ECRI Calls it "A Recession of Choice"
January 25, 2008: "ECRI Says There Is A Window of Opportunity for the US Economy"
January 05, 2008: "ECRI Says Fed Has Room To Cut Rates Despite Fears of Inflation"

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