NBER Announces US Recession Ended In June 2009, No Announcement Yet On When Depression Is Due To End

Tyler Durden's picture

The NBER has finally announced the most worthless and overdue piece of data, namely that somehow, miraculously, the US recession that started in December of 2007 ended in June of 2009. We have yet to hear when the distinguished Ph.D.-bearing shamans of Keynesianism at the NBER will convene to decide when the Depression that started in December of 2007 will end. Our estimate is sometime in the mid 2020s, long after the Dow hit 36,000 as news of total nuclear annihilation was priced in by WOPR. From the NBER: "The Business Cycle Dating Committee of the National Bureau of Economic
Research met yesterday by conference call. At its meeting, the committee
determined that a trough in business activity occurred in the U.S.
economy in June 2009. The trough marks the end of the recession that
began in December 2007 and the beginning of an expansion. The recession
lasted 18 months, which makes it the longest of any recession since
World War II. Previously the longest postwar recessions were those of
1973-75 and 1981-82, both of which lasted 16 months.
" Somehow we think the 17% of America's labor pool that is not fully employed will beg to differ with this assessment. But at least bankers will be able to justify their 2010 record bonuses.

Full NBER press release:

CAMBRIDGE September 20, 2010. The Business Cycle Dating Committee of the
National Bureau of Economic Research met yesterday by conference call.
At its meeting, the committee determined that a trough in business
activity occurred in the U.S. economy in June 2009. The trough marks the
end of the recession that began in December 2007 and the beginning of
an expansion. The recession lasted 18 months, which makes it the longest
of any recession since World War II. Previously the longest postwar
recessions were those of 1973-75 and 1981-82, both of which lasted 16

In determining that a trough occurred in June 2009, the committee
did not conclude that economic conditions since that month have been
favorable or that the economy has returned to operating at normal
capacity. Rather, the committee determined only that the recession ended
and a recovery began in that month. A recession is a period of falling
economic activity spread across the economy, lasting more than a few
months, normally visible in real GDP, real income, employment,
industrial production, and wholesale-retail sales. The trough marks the
end of the declining phase and the start of the rising phase of the
business cycle. Economic activity is typically below normal in the early
stages of an expansion, and it sometimes remains so well into the

The committee decided that any future downturn of the economy would
be a new recession and not a continuation of the recession that began in
December 2007. The basis for this decision was the length and strength
of the recovery to date.

The committee waited to make its decision until revisions in the
National Income and Product Accounts, released on July 30 and August 27,
2010, clarified the 2009 time path of the two broadest measures of
economic activity, real Gross Domestic Product (real GDP) and real Gross
Domestic Income (real GDI). The committee noted that in the most recent
data, for the second quarter of 2010, the average of real GDP and real
GDI was 3.1 percent above its low in the second quarter of 2009 but
remained 1.3 percent below the previous peak which was reached in the
fourth quarter of 2007.

Identifying the date of the trough involved weighing the behavior of
various indicators of economic activity. The estimates of real GDP and
GDI issued by the Bureau of Economic Analysis of the U.S. Department of
Commerce are only available quarterly. Further, macroeconomic indicators
are subject to substantial revisions and measurement error. For these
reasons, the committee refers to a variety of monthly indicators to
choose the months of peaks and troughs. It places particular emphasis on
measures that refer to the total economy rather than to particular
sectors. These include a measure of monthly GDP that has been developed
by the private forecasting firm Macroeconomic Advisers, measures of
monthly GDP and GDI that have been developed by two members of the
committee in independent research (James Stock and Mark Watson,
available here), real personal income excluding transfers, the payroll
and household measures of total employment, and aggregate hours of work
in the total economy. The committee places less emphasis on monthly data
series for industrial production and manufacturing-trade sales, because
these refer to particular sectors of the economy. Movements in these
series can provide useful additional information when the broader
measures are ambiguous about the date of the monthly peak or trough.
There is no fixed rule about what weights the committee assigns to the
various indicators, or about what other measures contribute information
to the process.

The committee concluded that the behavior of the quarterly series
for real GDP and GDI indicates that the trough occurred in mid-2009.
Real GDP reached its low point in the second quarter of 2009, while the
value of real GDI was essentially identical in the second and third
quarters of 2009. The average of real GDP and real GDI reached its low
point in the second quarter of 2009. The committee concluded that strong
growth in both real GDP and real GDI in the fourth quarter of 2009
ruled out the possibility that the trough occurred later than the third

The committee designated June as the month of the trough based on
several monthly indicators. The trough dates for these indicators are:

Macroeconomic Advisers monthly GDP (June)
The Stock-Watson index of monthly GDP (June)
Their index of monthly GDI (July)
An average of their two indexes of monthly GDP and GDI (June)
Real manufacturing and trade sales (June)
Index of Industrial Production (June)
Real personal income less transfers (October)
Aggregate hours of work in the total economy (October)
Payroll survey employment (December)
Household survey employment (December)

The committee concluded that the choice of June 2009 as the trough
month for economic activity was consistent with the later trough months
in the labor-market indicators - aggregate hours and employment -for two
reasons. First, the strong growth of quarterly real GDP and real GDI in
the fourth quarter was inconsistent with designating any month in the
fourth quarter as the trough month. The committee believes that these
quarterly measures of the real volume of output across the entire
economy are the most reliable measures of economic activity. Second, in
previous business cycles, aggregate hours and employment have frequently
reached their troughs later than the NBER's trough date. In
particular, in 2001-03, the trough in payroll employment occurred 21
months after the NBER trough date. In 2009, the NBER trough date is 6
months before the trough in payroll employment. In both the 2001-03 and
2009 cycles, household employment also reached its trough later than
the NBER trough date.

The committee noted the contrast between the June trough date for
the majority of the monthly indicators and the October trough date for
real personal income less transfers. There were two reasons for
selecting the earlier date. The first was described above -- the fact
that quarterly real GDP and GDI rose strongly in the fourth quarter. The
second was that real GDI is a more comprehensive measure of income than
real personal income less transfers, as it includes additional sources
of income such as undistributed corporate profits. The committee's use
of income-side measures, notably real GDI, is based on the accounting
principle that the value of output equals the sum of the incomes that
arise from producing the output. Apart from a random statistical
discrepancy, real GDI satisfies that equality while real personal income
does not.

The committee also maintains a quarterly chronology of business
cycle peak and trough dates. The committee determined that the trough
occurred in the second quarter of 2009, when the average of quarterly
real GDP and GDI reached its low point.

For more information, see the FAQs
and the more detailed description of the NBER's business cycle dating
procedure at http://www.nber.org/cycles/recessions.html. An Excel spreadsheet
containing the data and the figures for the indicators of economic
activity considered by the committee is available at that page as well.

The current members of the Business Cycle Dating Committee are:
Robert Hall, Stanford University (chair); Martin Feldstein, Harvard
University; Jeffrey Frankel, Harvard University; Robert Gordon,
Northwestern University; James Poterba, MIT and NBER President; James
Stock, Harvard University; and Mark Watson, Princeton University. David
Romer, University of California, Berkeley, is on leave from the
committee and did not participate in its deliberations.

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vote_libertarian_party's picture

Well that explains todays retarded stock rally...

MarketTruth's picture

And rally on as the PPT/Fed will spike it more once Obummer yaps his trap on TV this afternoon.

The fix is in! Get your Dow 12,000 caps ready.

Obama says, "I, with the help of govenment, have officially nded the recession."

Does he lie? Yes he can!

Sucks_to_be_Smart's picture

How are bankers making record bonuses this year?  Trading revenues are down across the board and IB activity hasn't picked up.  Debt issuance is low and Meredith Whitney is calling for 10% labor force cuts in the industry!



schoolsout's picture

Lack of truth in accounting...

MarketTruth's picture

Amen, in a sense this reminds me of how home values are down and asses so yet yearly taxes to pay on home increases.

The fix is in Boys.

curbyourrisk's picture

I think it more related to the POMO action this week.


Pump baby.......PUMP!!!

HelluvaEngineer's picture

Fuck it.  Let's do QE2 anyway!

Can we get an update on investor sentiment - 99% bullish?

Henry Chinaski's picture

My news feed this morning... no explanation necessary:

US Stocks Climb, Led By Homebuilders; S&P Breaks Above 1130
MarketWatch - Kristina Peterson - ‎8 minutes ago‎
NEW YORK (MarketWatch) -- US stocks climbed Monday, led by homebuilders as investors seized on encouraging earnings at the start of a week heavy on housing data and a benchmark index broke above a key technical level.

Homebuilder Confidence in US Held in September at Lowest Level in a Year
Bloomberg - Courtney Schlisserman - ‎11 minutes ago‎
Home sales will be slow to improve as unemployment hovers near 10 percent and foreclosures mount. Photographer: Andrew Harrer/Bloomberg Confidence among US homebuilders in September unexpectedly ...

Cognitive Dissonance's picture

"For we can fly, we can flyyy. Up, up and away in my beautiful, my beautiful balloooooooooooon."

Even the name of the group "The Fifth Dimension" fits so very well.

HarryWanger's picture

I always chuckle at MW headlines. They are just about as bad as CNBC - always looking for some justification for mind boggling market moves.

Again, the economic data has nothing to do with the markets. As long as Apple keeps announcing new products to sell to a gazillion Chinese, Naz will reach 5k within a year or two.

Internet Tough Guy's picture

So that's what, 15 years just to make a nominal round trip and still down about 40% in inflation adjusted terms. Too many victories like that will leave you broke, Harry.

HarryWanger's picture

AAPL was 9 bucks 15 years ago. That's a huge victory. Not for me, I only bought it at 239 just a couple of weeks ago. For those who bought then, it's a bit more than a "nominal round trip".

Internet Tough Guy's picture

I thought we were talking about the nasdaq, but whatever. Chase those high fliers. By the way did you know the all time high for nortel was $870, about 15 years ago.

HarryWanger's picture

Two things:

-AAPL will flame out eventually as the market saturates but that's a fairly long way off. We're probably mid cycle on that as they begin to move into gigantic world markets. Then the inevitable will occur but by then (pre split) AAPL could be trading a $500.00. I'll keep my tight stop with 2% as I trail it upward.

-As long as the 3rd largest company in the world (2nd largest in US) continues this crazy growth, the markets will tag along. They have to with the insane weighting of AAPL in the NAZ and SPX.

So forget every ticker you have. Forget all the economic news. Just put up a tick chart of AAPL with a news feed of everything AAPL and that's all you need to know about the markets.

Caviar Emptor's picture

AAPL: Great American company. Makes all its stuff in China.

pat53's picture

Well, you might as well just stay long stocks and enjoy the ride then.

No Mas's picture


No matter the constant drum beat of bad news about our or the world's economy, this is pretty much a one way market and that way is up.

This market may not be the market of old, it may be purely a reflection of the fed's largess.  But still, if one buys low and sells high, one makes the same money. 

I have offically gone to the dark side.  My thanks to Ben and Tim.  The implicit promise of a higher market is one I shall use to enrich myself.

taraxias's picture

I'd be careful about that "enrich" thing if I were you.

When it's time to run for the exits the retail investor (that's you) will be the last to know.

I'm just saying.......

Ragnarok's picture

I want to see what Reggie has to say about this.

Trifecta Man's picture

Where's the jobs?  Record foreclosures?

Hephasteus's picture

We've grown past jobs. We just beam the fat boys straight into peoples heads.


NumberNone's picture

The report doesn't say that things are better, it just says the recession ended.  lol.  In fact they have the balls to say "The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007." 

So there you go.  Welcome to your recovery.  If the bottom falls out tomorrow, that's a NEW recession. 

Men are so simple and so much inclined to obey immediate needs that a deceiver will never lack victims for his deceptions - Niccolo Machiavelli

suteibu's picture

That's the good news.  The bad news is that all of the debt, the high unemployment, and the slow drip of government intervention is the new normal.

HarryWanger's picture

Actually, the recession officially ended when Steve Jobs introduced the "magical" iPad, making all life perfect for everyone. 

AAPL up another 2% today. I'll repeat this until the markets reach new all time highs; until Apple falters, this market will ramp higher and higher and higher.

Internet Tough Guy's picture

Pumpers said the same thing about Enron, Qualcomm, Nortel, Intel. Enjoy that hot stock of the day, harry.

HarryWanger's picture

Please, no disrespect but I'm not sure why people can't figure out that the SPX and NAZ are completely overweighted with AAPL. If it continues to move higher, simple math tells you the indices have to move with it. My god, it's 20% of the Nasdaq.

I'm not pumping AAPL, I'm just trying to point out the vast valley between what the economic data tells you and the market movement. There is very little correlation. Apple is not Enron or Nortel, etc., that's silly to even think that. They make innovative products that are tapping into a global market. That means there's a lot of growth ahead for them and, in turn, the markets. 

Internet Tough Guy's picture

I'm pretty sure Nortel made, and Intel makes pretty innovative products for a global market, but hey, AAPL is different. Right.

From 75 to 20 in ten years: http://finance.yahoo.com/echarts?s=INTC+Interactive#chart1:symbol=intc;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

ZakuKommander's picture

In Consumerland (a/k/a USA) the ecosystem of products that AAPL offers distinguishes it materially from those other companies.

Add to that Harry's observation that AAPL is a substantial percentage factor in key indexes, and one can see his point.

Of course, note that the dollar is falling, and THAT will fuel a market rise.

TooBearish's picture

If it wasn't so sad it would be funny - BTW Gartman saying ECRI is contrary indicator

vote_libertarian_party's picture

...and by contrary he means 100% of the time when that number is <= -10 a recession shows up shortly.



schoolsout's picture

Thank God...I was getting worried there. 



TooBearish's picture

From today's Gartmen:





Spikes Mark

Economic Slowdown Lows!:

Much is being made recently of the

weakness in the ECRI Leading

Index, but all we know from past

history is that when the Index

reaches the extreme lows such as

it has reached recently that marks

the end of economic weakness

rather than the onset.

NOTW777's picture

hilarious - cnbc completely turns over to obama worship central

docj's picture

Which is doubly hilarious when you consider that, if the recession actually did end in June 2009 - or 4-months after Barry O was installed - then almost precisely none of his "fixes" to the recession had anything to do with the end of the recession.

Not that any of this matters to the wage-slaves who are watching their neighbors' extended unemployment run out while their own wages have been flat for years in an increasing tax market.

Bob's picture

It's about time they set aside their silly differences and recognized they both work for the same people.

firstdivision's picture

Woohoo!  I am going to max out my credit cards, apply for new ones, and take out a loan and buy stocks to celebrate this miraculous recovery. 

Turd Ferguson's picture

Actually, you are closer than you think to the answer.

There is no way the Fed/Treas/WH/Congress will allow failure or austerity. Print, print, print is their only strategy. 95% of Americans will be murdered by inflation but they won't notice it because their wages and salaries will have doubled, too.

Go ahead. Take on as much debt today as you can. Pay it off tomorrow in your 70%-devalued currency. 

Robert J Moran's picture

 National Bureau of Economic Research met yesterday by conference call. 

... they phoned it in!

ejmoosa's picture

Looks like they are building the case that Cash for Clunkers actually saved America.

Too bad for them that ZHers know better.


doomandbloom's picture

not sure who first talked about DOW 36,000

but recently i came across this guy who does stock forecasting based on astrological charts...even he says the same :-)


Turd Ferguson's picture

The great demographer, Harry Dent, first promulgated Dow 36,000 back in the early 90s.

It was supposed to have happened by 2011. It still might.

cnbcsucks's picture

By 2011???   By the looks of this completely unfounded ramp this morning, we could be there by the end of the week.  This market is a joke...


goldmiddelfinger's picture

But first-----Big commodity crash beginning today. Maybe today is the top?...and big equity crash Oct 3-13

Internet Tough Guy's picture

I'm gonna go with Shadowstats, sorry NBER.

Joaquin's picture

The NBER also announced that the Titanic finished sinking at 2:20 AM April 15, 1912 and, as it was already laying on the bottom in pieces, it was not sinking anymore after that.

RobotTrader's picture

PCLN up $11

By the way, when is Eric King going to interview William Shatner??