No one indicator is used to determine a recession. Rather, it’s a group of people, called the Business Cycle Dating Committee.
WSJ explains how this group decides when the U.S. has entered a recession, and why knowing that date is so important.
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In the realm of economics, a recession is defined as two consecutive quarters of negative economic growth. But who decides when a recession officially begins? That responsibility falls to the National Bureau of Economic Research’s Business Cycle Dating Committee, a little-known group of economists based in Cambridge, Massachusetts.
Unlike other government agencies or organizations that track economic indicators, the committee doesn’t release frequent reports or provide regular updates on the state of the economy. Instead, it operates behind the scenes and only announces the beginning and end of recessions after the fact.
The committee was created in 1978, during a period of high inflation and economic instability, in order to provide a more objective and scientific approach to dating business cycles. Each member of the committee is chosen for their expertise in business cycle analysis and appointed by the president of the NBER. The current chair of the committee is Robert Hall, a professor of economics at Stanford University.
In order to determine when a recession begins, the committee analyzes a variety of economic data such as gross domestic product, income, employment, industrial production, and retail sales. They also take into account any other factors that may be affecting the economy, such as natural disasters, major policy changes, or global events.
Once the committee determines that the economy has entered a recession, they typically announce it several months after the fact. This is because it takes time to collect and analyze all of the relevant economic data, and the committee wants to make sure they have a complete picture of the situation before making a formal announcement.
So why does it matter when the committee declares a recession? For one, it can help to guide policy decisions by government officials and central bankers. If the committee announces that the economy is in a recession, it may prompt policymakers to take action in order to mitigate the effects of the downturn.
It can also provide valuable information for investors and businesses. When a recession is officially declared, it can be a signal for investors to adjust their portfolios and for businesses to prepare for a slowdown in demand.
While the committee’s role in determining when a recession begins may seem small, it can have a significant impact on the broader economy. By providing an objective and scientific analysis of the business cycle, the committee helps to guide policymakers, investors, and businesses through periods of economic uncertainty.
Successful people don't become that way overnight. what most people see at a glace- wealth.a great career, purpose-is the result of hard work and hustle over time.I pray that anyone who reads this will be successful in life.
Lol basically imagine a doctor telling you the patient is dead after they have died – 5 months later. That's what the video is saying. Until the patient dies everything is fine.
Basically the committee is useless for traders
Successful people don't become that way overnight. what most people see at a glace- wealth.a great career, purpose-is the result of hard work and hustle over time.I pray that anyone who reads this will be successful in life.
50% recession – 50% expansion
When ya can't afford food but it's not a recession
Recessions are a natural part of the economic cycle; all you can do is be prepared and plan accordingly. I graduated into a downturn (2009). My first job out of college was as an aerial acrobat on cruise ships. Today, I'm a VP at a global corporation, own three rental properties, invest in stocks and businesses, run my own company, and have seen my net worth increase by $500k in the last four years.
If it’s a republican in office it’s a recession. If it’s a democrat, the definition of recession changes. Welcome to stupid world
Schaffe schaffe Häusle baue für die Enteignung im Pflegeheim 🙂
Deutschland
The current American problem is that they lost their industrial base and have nothing to trade besides guns and overprinted money. I'm delighted I sold off the majority of my significant assets on the financial market at a premium price before I declared them terrible investments! Because they misjudged China, the US economy is currently in trouble.
Wait. What’s the definition of recession? Oh that’s right 7 consecutive years of negative growth. Trust me, I work for the govt.
should be mechanical, maybe with some/limited level of overwrites.
ARREST OCASIO CORTEZ
Thanks for this educative video .
I believe with time people will understand better how the Crypto currency market works but unfortunately by then it might be a bit late
Fab
The committee member can place a Short on the market prior declaring it recession!
These 8 peoples determines our simulated reality.
Is it a recession or nobody had the ball to drop?
Biden is lying about jobs, home sales and the rising food prices. The market is a miss and all the president is concerned about is regaining control of both houses of the government to push there disastrous views that are hurting the people thus the United States. Things keep getting worse and at the same time he stills tells the people that thing are better now then when Trump was president. We are smarter than he give us credit for, luckily the Republicans are exposing him.
We are in a recession, who are they kidding. It is turning into a political game with Biden at the wheel.
2023 May.
By the time they publicly announced the recession, the recession already finished because most of these indicators are lagging indicators.
success is dependent on the action or steps you take to achieve it.. show me a man who doesn't have an investment and I will tell you how soon he'll go broke .. investment is building a safe heaven for the future. with the right choice of investment that has at least 1% minimum risk and with an expert guidance profit and interest is 100% guaranteed.
Is recession the opposite of progression?
"If the committee felt comfortable"
#OpposeMassLayoffs
Interest rates don’t determine recessions lol, they contribute to it but definitely aren’t responsible for it.
There might be an economical turmoil but there is no doubt that this is still the best time to invest.
8 yt people determine when our economy is in trouble?
when the tv says we are, duh. stick to your programming, npcs.
HAHAHA the definition since god was a child: did GDP drop by 2 or more consecutive quarters? If yes, recession. Biden and Bush both tried to redefine what recession means for political gain.
Is GDP the best? Not really. But that is still the definition. Literally just look it up.
Sales and industrial production has been falling since October 2022. We're probably in a recession.
Can I have the formula for determining a recession?
Great video.
Economics is generally regarded as a social science, although some critics of the field argue that economics falls short of the definition of a science for a number of reasons, including a lack of testable hypotheses, lack of consensus, and inherent political overtones.
This story started to be created weeks ago
That is untrue. A recession is defined as 2 consecutive quarters of negative GDP growth (our GDP shrinking instead of expanding).
A recession isn’t defined as “a rough economic period” or a time with high inflation, though those often occur during a recession. A recession is a SPECIFIC economic state with specific criteria and this has always been the case
Isn’t it flowing the money all about money economy is money money is life everything cost money money is life money money money
The Business Cycle Dating Committee sounds like an interesting dating site for economists….
Our entire economy is being held up by poor minded spenders..
How do you induce inflation? Increase money supply by 30% in 2 years. How do you stop inflation? Increase interest rate until the economy is in a recession.
Wsj: “but employment, a key indicator for the committee, was still strong”
Graph: shows a nearly 33% drop in employment…. AND, wsj circled them.
Credibility…?
Who determines when a recession begins?
The Fed and a dictionary.
OMG, it is like the French immortals… but instead of language … for an econimic intepretation…
This video basically: “ The committee of 8 individuals aren’t politically at all and based on data, but definitely reporting a recession is political”. Wow
Economic is always connecting to politic. It's absolutely. How to handle economy of state will always be followed by political will.