By the Time NBER Announces A Recession, It's Over
From today's Washington Post: The NBER's pronouncements historically come long after recessions have begun, a whopping seven months on average. By the time the bureau announced the recession of 1991, it had already ended.
It's true. On April 25, 1991, the NBER announced that a recession started in July of 1990. It later announced at the end of 1992 that the recession actually ended in March 1991. It was an 8 month recession, and it took the NBER 9 months to make the official determination.
And for the last recession that lasted from March to November 2001, the NBER announced on November 26, 2001 that a recession started in March, just about the time that the recession was ending. In July 2003, the NBER made the official announcement that the recession ended in November 2001. It was an 8 month recession, and it took exactly 8 months for the NBER to make the official recession announcement.
Bottom Line: If the NBER's track record continues, by the time it announces the next recession, it's likely the recession will already be over. So sit back and relax. Even if there is a recession in 2008 or 2009 or 2010, we probably won't know for sure until it's just about over. And by that time it will, well, be over.