Definition of a dating

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Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP.

How does that relate to the NBER's recession dating procedure?

We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough.

Thus, the unemployment rate is often a leading indicator of the business-cycle peak.

For example, the unemployment rate reached its lowest level prior to the December 2007 peak of activity in May 2007 at 4.4 percent and climbed to 5.0 percent by December 2007.

For example, in the recovery beginning in March 1991, the unemployment rate continued to rise for 15 months after the trough. In the current recovery, the lag was only 4 months, from the trough in activity in June 2009 to the highest level of the unemployment rate in October 2009.

Q: What data from the National Income and Product Accounts are used in the calculation of real personal income less transfers? Macroeconomic Advisers, a consulting firm, prepares estimates of monthly real GDP.

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