The National Bureau of Economic Research (NBER) announced yesterday that the recession is over, and officially ended in June 2009. The NBER gets to make the official “call” on when a recession starts and finishes. Unfortunately, that call is based exclusively on the growth or decline of output of goods and services. In other words, even though this economy continues to lose jobs, and non-farm payrolls are down 329,000 since the official end in June 2009, jobs are irrelevant to the decision.
The chart below was in the NY Times on Sept 20, 2010. It says that the US economy has lost more jobs that it has added since the recovery began in June 2009.
The NBER also states that “any contraction that might lie ahead would be a separate and distinct recession, and one that the Obama administration could not claim to have inherited.”
This is total nonsense: the aftermath of the Great Recession (the first output dip was the sharpest decline in employment and economic output since WW II) has left our economy in a very feeble and very heavily indebted state.
Therefore, if we do get a second recession in the next year, it won’t really be a double dip, but rather an extension of the first dip, the dip that we have never exited from.
Anyone can choose their political jacket and argue whether Obama’s policies may have exacerbated the recession that we are currently in. However, we just don’t believe that the President or the Democratic Congress is responsible for the Great Recession itself. The NBER just took another step towards irrelevancy.
By Richard Piotrowski CFA is a former #1 ranked securities analyst, and the Managing Partner of Outram Research LLC, which focuses on assisting startups and prospective turnaround companies define an executable product strategy, competitive strategy, and an exit strategy. You can follow Richard on Twitter: @Angelpitchdoc. He can be reached at richard@outramresearch.com, or at his blog: angelpitchdoc.wordpress.com. Also check out our website: www.outramresearch.com
