The National Bureau of Economic Research said the U.S. economy slipped in to a recession in December of 2007. The NBER does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a decline in economic activity, spread across the economy and lasting more than a few months.WASHINGTON
(Reuters) - The economy slipped into recession in December 2007, the
National Bureau of Economic Research, the prestigious private research
institute that is regarded as the arbiter of U.S. recessions, declared
on Monday.
The NBER's business cycle dating committee said its members met by
conference call on Friday and concluded that the 73-month economic
expansion had ended. The previous period of economic expansion, which
ended in 2001, lasted 10 years.
The current recession, which many economists expect to persist
through the middle of next year, is already the third-longest since the
Great Depression, behind only the 16-month slumps of the mid-1970s and
early 1980s.
The NBER does not define a recession as two consecutive quarters of
decline in real gross domestic product, as is the rule of thumb in many
countries. Instead, it looks for a decline in economic activity, spread
across the economy and lasting more than a few months.
The current downturn was particularly tricky to define because gross
domestic product remained positive until the third quarter this year.
The NBER said its committee looked at payrolls, which peaked in
December 2007 and declined in every month since then, as well as real
GDP and other data series to determine when the recession started.
"The committee determined that the decline in economic activity in
2008 met the standard for a recession," the NBER said in a statement.
"All evidence other than the ambiguous movements of the quarterly
product-side measure of domestic production confirmed that conclusion."
The White House acknowledged the NBER's declaration, but said that
did not change its course on coping with the financial crisis that has
raged since August 2007.
"The most important things we can do for the economy right now are
to return the financial and credit markets to normal, and to continue
to make progress in housing, and that's where we'll continue to focus,"
White House spokesman Tony Fratto said.
(Reporting by Emily Kaiser and Tabassum Zakaria; Editing by Leslie Adler)
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