|AWHILE BACK, there was a controversy about whether or not the US is in
a "recession" at present. Officially, we're not (as far as we know)
while most economists now seem to think that the current period will
be likely to be dubbed a recession when the NBER gets around to it.
One generally-ignored dimension concerns the actual definition of a
"recession." The "official" definition of a "recession" comes from the
very-mainstream National Bureau of Economic Research's Business Cycle
Dating committee. Journalists summarize their (relatively complex)
definition by saying that having real GDP fall during two or more
quarters in a row defines a recession.
The problem with these definitions -- especially the journalistic one
-- is that the emphasis is totally on production sold through the
market. That's what GDP is all about, and no more. This might be
thought of as a totally capitalist definition of a recession.
Most workers, on the other hand, instead care about the growth of paid
employment, i.e., the availability of jobs. So I decided to find
"employment recessions," where quarterly employment figures fall for
two or more quarters in a row.
This is like the journalistic definition in terms of ease of
calculation, since the NBER one is so hard to calculate. (It also
coincides with the common or "oral tradition" idea of a growth
recession, in which GDP growth slows but does not turn negative,
hurting employment.) I added one adjustment: the fall of employment
is measured relative to the trend growth in employment in order to get
a sense of the cycle, not the trend. (The trend rate has been falling
over the decades, but that's another topic.)
Below, I listed "employment recessions." My conclusions:
1) there are several employment recessions that do not coincide with
NBER recessions: 1951/2, late 1959, late 1962, and early 1986.
2) employment recessions often begin before NBER recessions (early
1957, late 1979, early 1981, early 1990, late 2000).
3) employment recessions almost always end after NBER ones (the
exception being in 1980). This problem has gotten worse, with the
"jobless recoveries" of the two Bush recessions that have occurred so
4) we're already in an employment recession, starting in the fourth
quarter of 2006.
The Complete List. Since 1951, we get the following "employment
recessions" listed by year/quarter: dated by start and finish. In each
of these quarters employment fell relative to trend growth, either
preceded by or followed by another fall in employment relative to the
trend. Note: the measures do not indicate the _depth_ of the
employment recession, only its length.
1951/3 - 1952/3 -- does not coincide with an NBER recession.
1953/2 - 1954/4 -- coincides with an NBER recession, but ends two
quarters after it.
1957/1 - 1958/3 -- begins 2 quarters before the NBER recession, while
ending one quarter after it.
1959/3 - 1959/4 -- does not coincide with an NBER recession.
1960/2 - 1961/2 -- coincides with an NBER recession, but ends one
quarter after it.
1962/3 - 1963/1 -- does not coincide with an NBER recession.
1969/4 - 1971/3 -- coincides with an NBER recession, but ends three
quarters after it.
1973/4 - 1975/2 -- coincides with an NBER recession but starts one
quarter after it and ends one quarter after it.
1979/4 - 1980/3 - coincides with an NBER recession but starts one
quarter before it.
1981/1 - 1983/1 - starts 2 quarters before the NBER recession and ends
1 quarter after it.
1986/1 - 1986/2 -- does not coincide with an NBER recession.
1990/2 - 1992/4 -- starts 1 quarter before the NBER recession and ends
1 3/4 year after it. This is Bush the Father's famous "jobless
2000/3 - 2004/1 -- this one starts 2 quarters before the NBER one and
ends 2 1/4 years after it. This is Bush the Son's repeat of the
2006/4 - present. So far, it does not coincide with an official NBER