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Is the Recession Really Over?
Subject Recession and Job Growth
Topic Recession
Key Words Recession, Employment, Job Growth, Business Cycle, and GDP
News Story

The United States economy has been out of a recession since November of 2001 according to a report from The National Bureau of Economic Research (NBER). The NBER press release stated, "The committee determined that a trough in business activity occurred in the U.S. Economy in November 2001." The economist on the NBER panel, however, did not reflect on the current condition of the economy which many analysts suggest is worsening.

One panel member, Robert Hall of Stanford University, said the information was released about this recession to distinguish it from future recessions that may occur. The statement from the panel said, "The fact that the broadest, most comprehensive measure of economic activity is well above its pre-recession levels implied that any subsequent downturn in the economy would be a separate recession."

The 2001 recession was described by Hall as a mild recession, being "slightly less than average." He further noted however, that an average recession includes data from a couple of very severe recessions. In determining that the recession bottomed out in November of 2001, the committee did not suggest that the economy has returned to normal operating levels. In fact, the report stated that, "… the most recent data indicate that employment has not begun to recover at all."

The NBER panel released this information now, before the 2004 election to avoid any political flashback. "This is not the first time that there has been some political sensitivity," Hall conceded. "We try very, very hard to essentially ignore politics." This is the first time in 25 years as chairman of the committee that Hall has seen a recession end at the same time employment was falling, so the specter of partisan politics is likely to follow this issue into the election year.


(Updated August 27, 2003)

Questions
1.

Name and discuss the four phases of the business cycle.

2. What is the economic definition of a recession?
3. What kind of fiscal policy would you use to fight recession?
Source Jimmy Moore, "Economic Panel Shows U.S. Economy Out Of Recession," Talon News, July 18, 2003.

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