The red highlights in the Excel File available on the NBER website indicate when the peak or trough month has been outside the peak or trough quarter. Generally, the peak or trough quarter contains the peak or trough month, but there are exceptions, with 2019Q4 the most recent. Q: How does the committee's quarterly chronology relate to its monthly chronology?Ī: The committee makes a separate determination of the calendar quarter of a peak or trough, based on measures of aggregate economic activity over the relevant quarters.
There is no fixed rule about what measures contribute information to the process or how they are weighted in our decisions. These include real personal income less transfers (PILT), nonfarm payroll employment, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, employment as measured by the household survey, and industrial production. Q: What indicators does the committee use to determine peak and trough dates?Ī: The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. If there were a peak in June of the following year, then the expansion would have a duration of nine months, with October of the previous year as the first month and June of the current year as the last month. Because April counts as the first month of the recession and September counts as the last month of the recession, the duration of the recession is six months. Q: How is the duration of expansions and contractions calculated from NBER peak and trough dates?Ī: Suppose there is a peak in March and a trough in September of the same year. Because the most recent trough was in April 2020, the last month of the recession was April 2020 and the first month of the subsequent expansion was May 2020. In the NBER’s convention for measuring the duration of a recession, the first month of the recession is the month following the peak and the last month is the month of the trough. Q: If the most recent trough was in April 2020, is it correct to say the expansion started in April or in May?Ī: The NBER chronology does not identify the precise moment that the economy entered a recession or expansion. However, the time that it takes for the economy to return to its previous peak level of activity may be quite extended. Expansion is the normal state of the economy most recessions are brief. An expansion is a period when the economy is not in a recession. The committee subsequently determined that the trough occurred two months after the peak, in April 2020. For example, in the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief. The committee's view is that while each of the three criteria-depth, diffusion, and duration-needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. Q: What is a recession? What is an expansion?Ī: The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. Similarly, a month is designated as a trough when economic activity reaches a low point and begins to rise again for a sustained period. The peak is the month in which a variety of economic indicators reach their highest level, followed by a significant decline in economic activity. The chronology identifies the dates of peak and trough months in economic activity. Q: What is the basic job of the Business Cycle Dating Committee?Ī: The NBER’s Business Cycle Dating Committee maintains a chronology of US business cycles. Transportation Economics in the 21st Century.Training Program in Aging and Health Economics.The Roybal Center for Behavior Change in Health.Retirement and Disability Research Center.Measuring the Clinical and Economic Outcomes Associated with Delivery Systems.Improving Health Outcomes for an Aging Population.Early Indicators of Later Work Levels, Disease and Death.Conference on Research in Income and Wealth.Boosting Grant Applications from Faculty at MSIs.Productivity, Innovation, and Entrepreneurship.International Finance and Macroeconomics.