Recession Over, NBER Says

The National Bureau of Economic Research, a Cambridge-based non-profit research organization that announces start and end dates of economic recessions, declared Monday that the recent U.S. recession officially ended in June 2009—well over a year ago.

The report was released by the NBER Business Cycle Dating Committee, a seven-person committee that includes three Harvard faculty, and established that the trough in national economic productivity occurred in June 2009.

Since then, measures of economic performance such as gross domestic product have indicated that the nation has entered the recovery stage.

This evaluation, however, does not address the fact that the economy still remains far from its pre-recession level of activity.

As political economy professor James H. Stock, a member of the NBER’s Business Cycle Dating Committee, said, “businesses are keenly aware that economic activity remains well below its potential.”

Several key indicators suggest economic weakness and hint against the progression of a robust economic recovery.

Stock noted that the consumer savings rate, currently at 5.9 percent, has remained extremely elevated since the trough of the recession, a problem that continues to plague small business owners by causing a lack of aggregate demand.

Consumers have continued to act as if the prospects of recovery are dim, and their unwillingness to spend hampers the recovery of consumer-driven businesses.

And while GDP has rebounded significantly, unemployment levels—a measure that typically lags behind productivity when a country is emerging from a recession—are still high, said Stock.

Of an estimated 8.5 million jobs lost during the recession, only 1.3 million have been recovered.

“From an employment perspective,” Stock said, “we are not anywhere near where we want to be. There are an enormous number of people without work.”