commissioner.org
| Source | Jim Devine |
| Date | 08/04/03/12:37 |
| AWHILE BACK, there was a controversy about whether or not the US is in
a "recession" at present. Officially, we're not (as far as we know) while most economists now seem to think that the current period will be likely to be dubbed a recession when the NBER gets around to it. One generally-ignored dimension concerns the actual definition of a "recession." The "official" definition of a "recession" comes from the very-mainstream National Bureau of Economic Research's Business Cycle Dating committee. Journalists summarize their (relatively complex) definition by saying that having real GDP fall during two or more quarters in a row defines a recession. The problem with these definitions -- especially the journalistic one -- is that the emphasis is totally on production sold through the market. That's what GDP is all about, and no more. This might be thought of as a totally capitalist definition of a recession. Most workers, on the other hand, instead care about the growth of paid employment, i.e., the availability of jobs. So I decided to find "employment recessions," where quarterly employment figures fall for two or more quarters in a row. This is like the journalistic definition in terms of ease of calculation, since the NBER one is so hard to calculate. (It also coincides with the common or "oral tradition" idea of a growth recession, in which GDP growth slows but does not turn negative, hurting employment.) I added one adjustment: the fall of employment is measured relative to the trend growth in employment in order to get a sense of the cycle, not the trend. (The trend rate has been falling over the decades, but that's another topic.) Below, I listed "employment recessions." My conclusions: 1) there are several employment recessions that do not coincide with NBER recessions: 1951/2, late 1959, late 1962, and early 1986. 2) employment recessions often begin before NBER recessions (early 1957, late 1979, early 1981, early 1990, late 2000). 3) employment recessions almost always end after NBER ones (the exception being in 1980). This problem has gotten worse, with the "jobless recoveries" of the two Bush recessions that have occurred so far. 4) we're already in an employment recession, starting in the fourth quarter of 2006. The Complete List. Since 1951, we get the following "employment recessions" listed by year/quarter: dated by start and finish. In each of these quarters employment fell relative to trend growth, either preceded by or followed by another fall in employment relative to the trend. Note: the measures do not indicate the _depth_ of the employment recession, only its length. 1951/3 - 1952/3 -- does not coincide with an NBER recession. 1953/2 - 1954/4 -- coincides with an NBER recession, but ends two quarters after it. 1957/1 - 1958/3 -- begins 2 quarters before the NBER recession, while ending one quarter after it. 1959/3 - 1959/4 -- does not coincide with an NBER recession. 1960/2 - 1961/2 -- coincides with an NBER recession, but ends one quarter after it. 1962/3 - 1963/1 -- does not coincide with an NBER recession. 1969/4 - 1971/3 -- coincides with an NBER recession, but ends three quarters after it. 1973/4 - 1975/2 -- coincides with an NBER recession but starts one quarter after it and ends one quarter after it. 1979/4 - 1980/3 - coincides with an NBER recession but starts one quarter before it. 1981/1 - 1983/1 - starts 2 quarters before the NBER recession and ends 1 quarter after it. 1986/1 - 1986/2 -- does not coincide with an NBER recession. 1990/2 - 1992/4 -- starts 1 quarter before the NBER recession and ends 1 3/4 year after it. This is Bush the Father's famous "jobless recovery.") 2000/3 - 2004/1 -- this one starts 2 quarters before the NBER one and ends 2 1/4 years after it. This is Bush the Son's repeat of the "jobless recovery." 2006/4 - present. So far, it does not coincide with an official NBER recession. |
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