At a glance
The National Bureau of Economic Research tracks business cycles - commonly known as recessions and expansions. These are the months when the last five recessions began and ended:
January 1980 - July 1980
July 1981 - November 1982
July 1990 - March 1991
March 2001 - November 2001
December 2007 - June 2009
Source: National Bureau of Economic Research
The U.S. economy is setting a record for the longest growth period since at least the mid-1800s.
Unemployment is low, job creation is strong and stock markets – despite recent large swings – are near all-time highs. But some warning signs are also popping up, including interest rates on short-term bonds climbing higher than rates paid on long-term bonds.
The fact that no previous economic expansion has lasted longer than 10 years means we're living on borrowed time because this one started in June 2009.
Let's explore some of the inevitables.
Q. Who decides we're in recession, and what do they base it on?
A. The National Bureau of Economic Research Inc. makes official pronouncements on the economy.
The Massachusetts-based nonprofit studies economic activity to determine whether things are getting better overall or worse. Unlike some groups, the bureau requires more than just two consecutive quarters of lower gross domestic product – or the total market value of the goods and services produced by a country – to declare a recession.
Instead, the nonpartisan research organization uses a complex matrix that measures significant and widespread declines in real GDP, real income, employment, industrial production and wholesale-retail sales. “Real” data have been adjusted to remove the effects of price changes.
The only way to recognize a recession, the bureau contends, is in the rearview mirror. By then, the country will have been grappling with it for six to 18 months, according to the bureau.
Q. Does the end of a recession mark when the economy becomes strong again?
A. No. A recession officially ends when the economy starts expanding again – long before the economy has found solid footing.
Think of a recession as the ride on a department store's down escalator. The minute you step off onto solid ground, the recession is officially over. But you're also in the economy's basement. Factories are closing, people are out of work and everybody is nervous.
The trip on the up escalator, which begins in the depths of the store, represents economic expansion. We've been on that ride for more than 10 years now, as of July 2019.
When it reaches its peak, a point that won't be obvious when it happens, the expansion is over and the next recessionary period – or downward ride – begins.
Q. Do we have to have a recession? Can't we just, as they say in New Orleans, let the good times roll?
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