Now I’ve been saying our economy was in the toilet for a while now, and it turns out, I wasn’t too far off base, at least according to to the US National Bureau of Economic Research (NBER):
The world’s stock markets suffered another round of falls yesterday as the body regarded as the arbiter of US recessions said the American economy’s 73-month economic expansion ended in December 2007.
The news came as surveys of business confidence across continents displayed further catastrophic declines. The US economy decreased at an annualised rate of 0.5 per cent in the third quarter of 2008, having grown by an annualised 2.8 per cent in the second quarter. Although it thus does not yet qualify as a recession according to the common definition of two successive quarters of negative growth, the US National Bureau of Economic Research’s business cycle dating committee employs a much more flexible definition of recession, as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity.”
Manufacturing in the US contracted in November at the fastest pace in 26 years, putting American factories at the sharp end of a global industrial slump, according to the Arizona-based Institute for Supply Management’s factory index. At 36.2, the reading is at its lowest level since 1982. A reading of 50 is the dividing line between expansion and contraction. Similar measures from China, the UK, the euro area, and Russia also all dropped to record lows.
Interestingly, while the NBER thinks the nation’s been in a recession since December 2007, back in April of 2008 President Bush said we absolutely weren’t in a recession:
And while we’re at it, I think the announcement by the NBER debunks former McCain campaign economic advisor Phil Gramm’s argument that America was just a nation of whiners and that we were in a “mental recession,” not an actual recession.