Cepr business cycle dating committee

Posted by / 23-Sep-2017 21:53

The committee places less emphasis on monthly data series for industrial production and manufacturing-trade sales, because these refer to particular sectors of the economy.

Movements in these series can provide useful additional information when the broader measures are ambiguous about the date of the monthly peak or trough.

It places particular emphasis on measures that refer to the total economy rather than to particular sectors.

These include a measure of monthly GDP that has been developed by the private forecasting firm Macroeconomic Advisers, measures of monthly GDP and GDI that have been developed by two members of the committee in independent research (James Stock and Mark Watson, (available here), real personal income excluding transfers, the payroll and household measures of total employment, and aggregate hours of work in the total economy.

The committee noted that in the most recent data, for the second quarter of 2010, the average of real GDP and real GDI was 3.1 percent above its low in the second quarter of 2009 but remained 1.3 percent below the previous peak which was reached in the fourth quarter of 2007.

There were two reasons for selecting the earlier date.

The first was described above -- the fact that quarterly real GDP and GDI rose strongly in the fourth quarter.

The committee concluded that strong growth in both real GDP and real GDI in the fourth quarter of 2009 ruled out the possibility that the trough occurred later than the third quarter.

The committee designated June as the month of the trough based on several monthly indicators.

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Previously the longest postwar recessions were those of 1973--82, both of which lasted 16 months.