The effects are all around us but you may have missed the announcement that the United States is officially in a recession. The Business Dating Committee (BDC) of the National Bureau of Economic Research (NBER), widely recognized as the nation’s leading economic research center, determined that a peak in monthly economic activity occurred in the US economy in February 2020, marking the beginning of a recession. The decision was announced in a memo released on June 8, 2020, available in full here . The BDC operates under the NBER’s Economic Fluctuations and Growth Program, and is the official arbiter of when business expansions and contractions, known as “peaks” and “troughs,” begin and end in the United States. Current members and other details about its work are available on the NBER website .
In determining when the economy peaks and enters a contraction, the BDC considers measures of economic activity in the nation, for example, gross domestic product, employment, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, employment as measured by the household survey, and industrial production. However, the BDC FAQs state, “There is no fixed rule about what measures contribute information to the process or how they are weighted in our decisions.”
Many of the metrics that might be considered by the BDC are available in Data Planet. In the chart below, two of the metrics of interest show the precipitous decline in GDP and employment during the first quarter of 2020: